Water stewardship: a shared responsibilityAccess to safe, clean water is a basic human right and essential to maintaining healthy ecosystems. BHP’s vision is for a water secure world by 2030. This is a world where water resources are conserved and resilient so they can continue to support healthy ecosystems, maintain cultural and spiritual values and sustain economic growth; where the human right to safe and accessible water and the traditional rights of Indigenous peoples are realised and upheld; and where water governance is effective and beneficial, ensuring communities and ecosystems thrive for future generations.
Water is integral to our business and vital to the longevity of BHP. We cannot operate without it. We use water in many ways, including but not limited to:
- extracting it for activities including ore processing, dust suppression, ecosystem irrigation and processing mine tailings
- managing it to access ore through dewatering (extraction of water from below the water table to allow access to ore), and at our legacy assets (legacy assets refers to those BHP-operated assets, or part thereof, located in the Americas that are in the closure phase)
- providing drinking water and sanitation facilities for employees and townships
- discharging it back to the receiving environment
- interacting with marine water resources through our port facilities
- utilising marine water for desalination
For a more detailed example of how we use water in our operated assets, refer to our Olympic Dam Case Study.
We have a responsibility to effectively manage our water interactions and avoid or minimise our potential or actual adverse impacts on water resources. We also recognise the importance of working with others to enable more effective water governance and stewardship across the communities, regions and countries where we operate.
Effective water stewardship must begin within our operated assets. From there, we can more credibly collaborate with others toward solutions to shared water challenges.
Responsible water management will ultimately make BHP more resilient and will contribute to enduring environmental and social value.
On this webpage, we describe how we manage our interactions with water and our water-related risks. BHP’s Risk Framework is described in the BHP Operating and Financial Review 9 – How we manage risk and this webpage provides specific information in relation to the nature of our water-related risks and how we manage them. We also share our performance in relation to our water withdrawals, consumption, discharges and recycling, and against our FY2018 to FY2022 public sustainability target.
Water Stewardship Position Statement
In FY2019, we developed our Water Stewardship Position Statement that expresses BHP’s commitment to and advocacy for water stewardship.
OverviewOur water disclosures here and in the BHP Operating and Financial Review, 7.16 - Water have been prepared predominately pursuant to the International Council of Mining and Metals (ICMM) Water Reporting Good Practice Guide (2nd Edition) (2021) (ICMM guidance) minimum disclosure standard, which is an international water accounting framework that enables comparable water data across the mining and minerals sector.
Our water reporting also considers other relevant frameworks. BHP is a signatory to the United Nations (UN) Global Compact’s CEO Water Mandate (CEO Water Mandate) and our disclosures here and in the BHP Operating and Financial Review serve as BHP’s Communication of Progress against the core elements of the CEO Water Mandate. Our reporting is also consistent with the Global Reporting Initiative (GRI); for more information on how this webpage meets the GRI standard, refer to our ESG Databook.
We have reported our water withdrawals and discharges and had water-specific public targets in place for more than 15 years. While water stewardship is not new for us, we believe we can do more to support enhanced water management practices at our operated assets and in collaborating with others for more effective water governance and stewardship across the communities, regions and countries where we operate.
BHP’s approach to water stewardship is visually represented in the figure below. Each element of our approach is discussed on this webpage.
In FY2019, we developed our Water Stewardship Position Statement that expresses BHP’s commitment to and advocacy for water stewardship. It outlines our vision for a water secure world by 2030. The Position Statement was developed following broad internal and external engagement and is aligned to the UN Sustainable Development Goals and other initiatives such as the CEO Water Mandate and the ICMM Water Position Statement. Our Position Statement describes the challenges facing fresh and marine waters across the globe and seeks to reinforce that it is everyone’s responsibility to take action together. Our approach to realising this vision includes taking action to improve water management within BHP and catalyse actions to strengthen water governance beyond our operated assets.
Our Water Stewardship Strategy was adopted in FY2017 to improve our management of water, increase transparency and contribute to the resolution of shared water challenges. The strategy was reviewed in FY2022 to ensure it remains effective and continues to align with ambitions of our business and society. The review resulted in some refinements to our FY2017 strategy and corresponding minor updates to our Water Stewardship Position Statement. The updated version of the strategy’s pillars is shown below.
Water challenges faced by BHP may include water scarcity or high variability in water supply due to climatic conditions or cumulative use or impacts within a catchment. These challenges need to be managed appropriately to avoid or minimise actual and potential adverse impacts and support positive impacts to the environment, communities and BHP’s ongoing viability. We seek to identify and assess opportunities to reduce stress on water resources from our operations and to collaborate with others on challenges and opportunities like water scarcity or high variability in water supply. For example:
- Our BHP Mitsubishi Alliance (BMA) operated asset is located in a region with highly variable rainfall. The consequence of this is that we may need to manage both an excess of water following flood events, and insufficient water supplies for operational needs resulting from a number of drought years, which may influence our projected production or costs. For example, in FY2020, a number of intense rainfall events in the location of BMA resulted in capture of water volumes above that which is needed for operations. We seek to divert excess rainfall and manage any excess water to avoid or minimise actual or potential adverse impacts to the environment and community while maintaining operational continuity, with a number of options available, including: storage for future use; transfer to other sites that require water; or discharge in line with legal requirements.
- Previously, our Escondida mine pumped groundwater from the Salar de Punta Negra and the Monturaqui aquifers in Chile, where freshwater resources are scarce. We recognised that this extraction was unsustainable in the long term so we progressively reduced groundwater withdrawal, leading to a full cessation of all groundwater withdrawal for operational purposes from the Salar de Punta Negra1 in 2017 and Monturaqui aquifers in December 2019, 10 years earlier than originally scheduled. Operational water requirements are now supplied predominately via a seawater desalination facility2. For more information refer to our Escondida case study.
- Western Australia Iron Ore (WAIO) operations commonly mine ore that is below the natural water table and must pump groundwater (an activity known as ‘dewatering’) to mine safely. The extracted water is used to meet the mine’s water use requirements, but at most sites the dewatering volumes exceed use requirements, generating surplus water. This surplus water is generally categorised as fresh in quality and is a recognised environmental, social and economic resource. In recent years, WAIO has worked towards sustainable water management by developing large water infrastructure schemes to return much of this surplus water to groundwater systems. In line with increasing surplus water, WAIO has updated its long-term water strategy seeking to optimise operational considerations as well as social value and environmental outcomes.
Our Water Stewardship Strategy was complemented by our public target and longer-term goal, for the FY2018 to FY2022 period. We achieved our FY2022 target to reduce FY2022 freshwater withdrawal by 15 per cent from adjusted FY2017 levels across our operated assets and, in FY2022, we set new 2030 goals.
Setting targets on critical metrics helps us focus our efforts, monitor progress and hold ourselves accountable. We have included water-specific public targets for more than 15 years. These have evolved from targets that were set from the top down, based on intensity metrics (water used per tonne of product), to a combination of risk-based targets and absolute volume reduction targets.
Through this experience, we have recognised that global-level intensity targets are challenging to define. Intensity targets are usually only appropriate at the individual operated asset level due to the regional nature of water resources and water-related risks as well as the individual variations in ore grade and production processes. We encourage our operated assets to identify intensity targets to improve performance above their contributions to our Group-wide target and longer-term goal outlined below.
1 Diversion of water occurs within the Salar Punta Negra aquifer to support direct irrigation of the wetland areas using small volumes of groundwater extracted from the same aquifer
2 Small quantities of groundwater are extracted from other local aquifers for pit dewatering to allow safe mining. This groundwater is used for operational water consumption
Our water targets and goals
In FY2017, we announced a five-year Group-wide water target to reduce FY2022 freshwater withdrawal by 15 per cent from FY2017 levels across our operated assets. For the purposes of this target:
- Withdrawal is defined as water withdrawn and intended for use (in accordance with the ICMM guidance) and ‘fresh water’ is defined as waters other than seawater, wastewater from third parties and hypersaline groundwater. Freshwater withdrawal also excludes entrained water that would not be available for other uses. These exclusions have been made to align with the target’s intent to reduce the use of freshwater sources which are subject to competition from other users or the environment.
- The FY2017 baseline data has been adjusted to account for the materiality of the worker strike affecting water withdrawals at Escondida in FY2017 and improvements to water balance methodologies at WAIO and BMA in FY2019, which included alignment of water balances to ICMM guidance. Discontinued operations (Onshore US-operated assets and Petroleum) and BHP Mitsui Coal (BMC), and non-operated joint ventures have been excluded.
The FY2022 target was developed taking into account each of our operated assets’ circumstances, the potential to reduce fresh water use and the operated asset’s potential level of contribution to a BHP water target. The target focused on the use of fresh water because it is usually the most critical water resource for the communities where we operate and the environment and is limited globally. Fresh water has significant direct use by society as it provides drinking water and water for amenities and recreation and it is important in enabling terrestrial environment to sustain ecosystem functionality. Therefore, elimination or reduction of risk and stress to freshwater resources has benefits to all. The majority of our operated assets are in terrestrial environments, where most of the world’s freshwater resource is located, and therefore we can have greater influence towards and directly conserve the freshwater resource. Protection of the marine environment is also important and our Water Stewardship Position Statement acknowledges the importance of protecting this resource as well as fresh water. The FY2018 to FY2022 target was exceeded with a 29 per cent reduction of freshwater withdrawal from adjusted FY20217 levels across our operated assets (refer to the BHP Operating and Financial Review 7.16 - Water for more information). A discussion on the way forward for us with respect to water targets is discussed below.
During FY2018 to FY2022, our water stewardship focus has improved our data quality and extended our understanding of the influencing factors on water related risk in the regions where we operate and we have continued our efforts to refine our approach to target and goal setting. For example, between FY2020 and FY2022, we developed water resource situational analyses (WRSAs)1 to establish a collective view on the shared water challenges within the regions or catchments in which we operate. The progress to date on the WRSAs has informed the healthy environment component of the 2030 goals.
While minimisation of freshwater withdrawal will remain important for us, in some of the regions where we operate we have come to understand that it may not be the key water-related risk or challenge for the region. Also during this period, there has been a focus on reducing the use of freshwater and shifting the source of water to lower quality sources. This has increased our use of non-freshwater sources in some of our regions.
In recognition of the variation of water sources, challenges and opportunities across the regions where we operate, we have commenced development of context-based water targets (CBWTs). We expect that, in some instances, our CBWTs may cause a shift from the previous focus on fresh water due to changing circumstances, for example in our Chilean assets where our water is now predominately sourced from desalination and therefore marine protection has become more important. The CBWTs are intended to contribute to more effectively addressing the shared water challenges in our operating regions and are informed by our catchment knowledge and our WRSAs. The CBWTs for our operated assets are intended to be released during FY2023 and performance against these CBWTs will be reported in future disclosures. More information on the WRSAs and CBWTs can be found at Shared Water Challenges.
We set a longer-term goal in FY2017 to collaborate to enable integrated water resource management in all catchments where we operate by FY2030. We have reviewed this longer-term goal during the development of our new 2030 goals and have incorporated our longer-term water goal into our healthy environment goal. The healthy environment goal continues to align with relevant UN Sustainable Development Goals, including Goal 6 that seeks to ‘ensure availability and sustainable management of water and sanitation for all’.
Each of our operated assets has assigned accountability and responsibility for its key water management activities and this is a requirement of our Water Management Standard.
Progress against our Water Stewardship Strategy and FY2018 to FY2022 target is reported in the water performance section below and in the water section in the BHP Operating and Financial Review, 7.16.1 A Water Resource Situational Analysis (WRSA) is a holistic assessment of the water situation where an asset operates. The process is designed to describe the water challenges that stakeholders share and the opportunities for collective action to address those challenges. The WRSA is prepared by a credible third party and draws on publicly available information and direct stakeholder input. Within a defined area that includes the water resources that BHP interacts, each WRSA includes assessment of:
- the sustainability of the volume and quality of the water resources, taking into account interactions of all other parties and any related environmental, social or cultural values and climate change forecasts
- the state of water infrastructure, water access, sanitation and hygiene of local communities
- the environmental health of the water catchments that feed the water resources taking into account the extent of vegetation, runoff, and any conservation of the area
- external water governance arrangements and their effectiveness.
Water and risk at BHP
BHP’s portfolio of long-life operated assets means that we must think about the long term, plan in terms of decades and consider the needs and circumstances of future generations. We need to consider both our operated assets’ needs and the potential for regional changes to water resources due to climate change, pollution, population growth and changing expectations.
The shared nature of water resources means we also need to think ‘beyond the fence’, which includes the interactions within catchments (a term used interchangeably with ‘basins’ on this webpage) when managing risk. As part of our Risk Framework, our operated assets are required to identify, assess and manage the water-related risks associated with their activities and make strategic business decisions in line with our Risk Appetite Statement. Our Water Stewardship Strategy has been progressing a range of improvements to further identify and assess water-related risk for our operated assets, including those at basin level. In FY2020, we completed our initial risk assessments for the catchments where we operate to develop a more comprehensive understanding of the water-related risks in our operational regions and we will continue to review our water-related risk profile in line with BHP’s risk process. For more information, see the BHP Operating and Financial Review.
The management of water-related risks needs to reflect the different physical environments, hydrological systems and socio-political and regulatory contexts in which we work. BHP must take into account the interactions that we, and external parties, have with water resources within catchments, shared marine regions and groundwater systems. In our disclosure of water-related risk, we present two facets of risk:
- operational water-related risks (threats or opportunities to BHP’s business, water resource, communities or the environment that are related to BHP activities at our operated assets)
- basin risks (threats or opportunities associated with inherent basin characteristics in areas where BHP operates, such as drought or flooding etc.), termed ‘inherent risk’ within the ICMM guidance
These two facets of risk seek to consider shared water challenges within the catchment and how catchment risk may influence company risks.
BHP and Basin Risk
We have used the World Wildlife Fund’s (WWF’s) Water Risk Filter since FY2021 to assess the level of basin risk of each of the locations where we have operated assets. We use the level of basin risk as an input to assessments of our operational water-related risks; usually as a causal factor and when determining the severity of potential impacts and likelihood of the risk event occurring.
The WWF Water Risk Filter is widely used and in FY2021 BHP adopted it in place of our own assessment method, seeking to provide greater transparency and clarity to external parties about how the evaluation of inherent basin risk is undertaken for areas where we operate.
The WWF Water Risk Filter assesses the level of risk in the basin based on the location of the basin from physical, regulatory and reputational perspectives using global (or local where available) datasets of 32 basin risk indicators. For example, the physical perspective is assessed using a variety of information such as water scarcity, flooding and drought potential among other physical attributes. For some of our operated assets, there are multiple individual sites within the asset that are geographically spread, such as our BMA, WAIO and North American legacy assets. For these operated assets, multiple locations across the geographical spread were assessed in the WWF Water Risk Filter and the average overall basin risk of the locations reported for the operated asset.
The WWF Water Risk Filter classifies risk into three categories as follows:
- Physical: Whether available water is too little, too much, unfit for use or inaccessible and/or whether the surrounding ecosystems are degraded, so may negatively impact water ecosystem services.
- Regulatory: The changing, ineffective, or poorly implemented public water policy and/or regulations. Regulatory water risk is heavily tied to the concept of good governance.
- Reputational: Stakeholders’ and local communities' perceptions of whether companies conduct business in a sustainable and responsible fashion with respect to water. While a considerable proportion of reputational water risk is operational (i.e. not basin-related), there are some basin pre-conditions that make reputational water risk more likely to manifest.
Other external water guidance (e.g. the CEO Water Mandate) also classify risk using the above three categories.
The methodology that is used by the WWF Water Risk Filter allows for the use of local knowledge to verify the basin risk outcomes. This approach is also supported by other external water disclosure frameworks, such as the CEO Water Mandate CDP*. The basin risk indicators used in the WWF Water Risk Filter are generally aligned with those previously used by BHP in basin risk (previously termed water sensitivity) evaluations.
Although we have presented the level of basin risk in accordance with the outcomes from the WWF Water Risk Filter in our tables and figures, the discussion below indicates where, based on our local knowledge, we consider that the outputs of the WWF Water Risk Filter may be under- or over-estimating basin risk.
In the majority of locations where we operate, BHP has previously assessed regulatory risk for the basin as higher than the WWF Water Risk Filter. Regulatory risk indicators within the WWF Water Risk Filter consider policy and laws, management instruments, governance and infrastructure and finance. In addition to these considerations, BHP’s previous assessment also considered the specific regulatory requirements applicable to each operated asset and other operators in the region, regional policy, plans and constraints and current discussions with local and national regulators regarding water permitting and performance for the operated asset and the region. As a result, we believe that the exposure from regulatory basin risk may be higher in the majority of the basins where we operate than is assessed by the WWF Water Risk Filter. We have incorporated our local knowledge of regulatory risk within our assessment of severity and likelihood in our operational water-related risk assessments.
BHP previously assessed basin physical risk for Olympic Dam as higher than under the WWF Water Risk Filter. This is because the Great Artesian Basin water resource supports important springs, and increasingly, there are requests by others to access this shared water resource (between Indigenous peoples, communities and other industries). This higher level of physical risk determined for Olympic Dam remains valid for FY2022 and has been incorporated into the relevant operational water-related risk assessment (e.g. catchment risk assessment for Olympic Dam).
BHP previously assessed basin reputational risk at our Chilean operated assets (Escondida and Pampa Norte) as high (versus the WWF Water Risk Filter’s assessment as medium) because there is widespread community interest in the use of groundwater and legacy impacts from the use of high Andean aquifers and increasing interaction with seawater resources in this region, which remains current for FY2022.
For our legacy assets in the United States and Canada and for WAIO and our Jansen Potash Project we are aligned to WWF Water Risk Filter’s rating of high (versus from low to medium previously assessed by BHP). Our previous assessment was based on a lower level of media scrutiny and conflicts at the time of reporting, however the WWF Water Risk Filter appropriately reflects increased stakeholder focus on the importance of cultural factors and biodiversity and includes events since we previously reported.
Refer to the graphics below for a summary of our basin risk level due to location for each operated asset and the catchment or marine region where they are located. Ten of our operated assets (over 80 per cent) are in areas of medium-to-high overall basin risk as assessed by the WWF Water Risk Filter. The graphics presented here include data from the following divested operations: BHC and operated assets in BHP's Petroleum business as they were under BHP ownership and operation during part of FY2022.
The graphic below shows the proportion of the overall risk that is contributed by physical, reputational and regulatory risk for each basin, as assessed by the WWF Water Risk Filter.
* CDP is an international not-for-profit organisation that operates the only global system for the measurement, disclosure and management of corporate environmental information.
The following table provides further characteristics of the basins, reflecting the outcomes from the WWF Water Risk Filter, where BHP operated in FY2022. This includes the river basin names, climatic conditions, basin physical risk, and projected potential for change in overall basin risk as a result of climate change (based on the Change in Overall Risk by 2050 WWF Water Risk Filter’s Pessimistic Scenario as described on the WWF Risk Filter). In addition, it provides information regarding the key water source, water activities and water consumptive uses of the water resources for each of our operated assets and information regarding discharge permitting. Note that due to the nature of our operations, our activities do not necessarily impact the basin named in the table below. For example, the WWF Water Risk Filter shows Olympic Dam as being in the Lake Gardiner river basin but our operations do not interact with or access surface water resource, as our key water source for Olympic Dam is groundwater sourced from the Great Artesian Basin. Similarly, our legacy assets are not in operation and therefore only actively source relatively minor volumes of water resources from some of the basins shown for the purpose of maintaining a water cover over potentially acid-generating tailings.
The basin physical risk level from the WWF Water Risk Filter is presented in this table to indicate whether BHP’s operated assets are in a ‘water stress area’. The rationale for BHP’s use of this measure to determine water stress is outlined below.
Water stress is defined by the CEO Water Mandate in the Corporate Water Disclosure Guidelines (2014) as ‘the ability, or lack thereof, to meet human and ecological demand for fresh water’. The Guidelines also state that ‘compared to scarcity, water stress is a more inclusive and broader concept. It considers several physical aspects related to water resources, including water availability, water quality, and the accessibility of water (i.e., whether people are able to make use of physically available water supplies), which is often a function of the sufficiency of infrastructure and the affordability of water, among other things. Both water consumption and water withdrawals provide useful information that offers insight into relative water stress. There are a variety of physical pressures related to water, such as flooding and drought, which are not included in the notion of water stress. Water stress has subjective elements and is assessed differently depending on societal values. For example, societies may have different thresholds for what constitutes sufficiently clean drinking water or the appropriate level of environmental water requirements to be afforded to freshwater ecosystems, and thus assess stress differently.’
The WWF Water Risk Filter uses the World Resources Institute (WRI) Aqueduct dataset to assess some of the indicators within the physical risk category, including baseline water stress. The WRI database determines baseline water stress based on an assessment of water scarcity and does not explicitly consider environmental flow requirements, water quality or access to water. The WWF Water Risk Filter in its assessment of physical risk includes indicators for the potential for drought, flooding and the risk to water quality and ecosystems services, and it therefore takes a holistic view of water stress as recommended by the CEO Water Mandate. For this reason we have elected to use the physical risk ratings from the WWF Water Risk Filter to define ‘water stress areas’. Operated assets with a physical risk rating of high or above, as assessed for the FY2022 period, are deemed to be in areas of water stress.
Using the approach for defining water stress discussed above (based on the WWF Water Risk Filter basin physical risk level), two of our operated assets (Escondida and Pampa Norte) are classified as being under high or very high water stress due to location. In line with the ICMM guidance and other frameworks (e.g. GRI/SASB), we have disclosed the proportion of our water withdrawal, discharge and consumption that occurs in water stressed areas in the water performance section on this webpage.
Our operational water-related risksOperational risks are those that have their origin inside BHP or occur as a result of our activities. Operational water-related risk refers to the ways in which water-related activities can potentially impact our business viability, water resource sustainability or influence achievement of our operational and strategic objectives. Our operational water-related activities and risks are influenced by, or can influence, both the basin and regional scale risks as described above. We prioritise the allocation of water-related risk management resources based on where we believe that there is an increased likelihood of potential adverse water-related impacts due to the nature of our activities (e.g., tailings and marine risks).
BHP’s Risk Framework and the Our Requirements for Environment and Climate Change standard govern the identification, assessment and management of operational water-related risks, and more information is contained in the detailed table below. The basin risk discussed above also seeks to inform the assessment of operational water-related risks, usually as a cause of a risk event. For example, high water scarcity within the basin may be a cause for the risk of inadequate water supply, or inadequate flood management may be a cause for an extreme weather impact. Basin risk may also influence the severity of potential impacts and likelihood of the operational water-related risk event occurring. For example, a high basin risk for ecosystem services may increase severity of potential impacts to environmental receptors, such as groundwater-dependent vegetation, if the water resource is not managed appropriately. For more information on our approach to risk management, refer to the BHP Operating and Financial Review 9 - How we manage risk.
Unmanaged or uncontrolled operational water-related risks have the potential to adversely impact:
- the health and safety of our employees, contractors and community members
- spiritual and cultural values
- communities, including social and economic viability
- environmental resources, including water, land and biodiversity
- legal rights and regulatory compliance
- reputation, investment attractiveness or social value proposition
- production, growth and development (including exploration)
- financial performance
The BHP Operating and Financial Review 9 – How we manage risk sets out BHP’s risk factors. This provides information pertaining to some potential water-related threats such as risks related to tailings, natural events and weather, geotechnical instability and critical infrastructure. Key management actions for each risk factor are discussed which include some water-related controls such as setting minimum technical specifications, structural integrity and design, monitoring and stakeholder engagement. The information presented on this webpage expands on this and outlines the current level of operational water-related risk at each operated asset.
The table below summarises the operational water-related risks that we have identified across our operated assets. Generally, the majority of our operational water-related risks monitoring relates to water scarcity (not having enough water for our operations or communities), water surplus (having too much water at our operations) or to having a potentially unacceptable change to the environment or community from BHP’s water activities.
The assessment of operational water-related risk presented below does not consider the effectiveness of controls to manage identified operational water-related risks, and therefore this table should be read as a hypothetical representation of the estimated impact to BHP in a worst-case scenario without regard to probability and assuming all risk controls, including insurance and hedging contracts, are ineffective.
We have classified the significance of BHP’s operational water-related risks as follows:
- Tier 1: Operational water-related risks that may have significant consequences, in the absence of controls (shown in the table below as ‘1’).
- Tier 2: Operational water-related risks that are still important, but may have lower consequences, in the absence of controls (shown in the table below as ‘2’).
- n/a: Operational water-related risks that are not applicable at that operated asset.
For the purposes of this disclosure, the basin and the operational water-related risk ratings in this table are reviewed each year at the operated asset level.
The following table provides more details about BHP’s Tier 1 operational water-related risks that we have identified, potential impacts and how we seek to proactively manage such risks. We consider how to avoid, minimise or mitigate potential or actual adverse impacts, or enable or enhance positive impacts, including to the environment and community (including cultural and spiritual values), health and safety and our financial performance and reputation. Under our mandatory minimum performance requirements for risk management, material risks are required to be reviewed periodically to evaluate performance.
All of the risk areas have potential physical, reputational and regulatory impacts. The management of operational water-related risks requires a mixture of management types/maturity that are described by the CEO Water Mandate, CDP and ICMM guidance.
Catchment Scope Risk associated with the potential alteration or modification of water catchments or resources in or around the areas where we operate. The risk may be posed by our current or historical activities or those of other water users, or cumulative and indirect impacts to shared water resources.
BHP acknowledges and seeks to include the cultural and spiritual values associated with water resources, especially to Indigenous communities, in consideration of this risk type.
Potential impacts Potential impacts to the community from BHP’s access to and use of water resources within the catchment include reduced water supply to communities, aesthetic impacts to recreational use for water or contamination of water sources, with potential reduction in availability for community water use. Ineffective catchment governance and regulation can make them more complex to manage.
The potential impacts to the environment may include changes to natural groundwater levels, changes to stream flows, water quality issues in ground, surface or marine environments and reduced pressure in groundwater aquifers that in turn, may affect the biodiversity, habitats and species that rely on the water sources.
Potential environmental impacts can contribute to adverse community impacts and affect the value of the water resource for future generations.
Unsustainable use of the water resource may affect production and a lack of understanding of the water resource may impact the operated assets ability to assess the long-term water management limitations and opportunities. Impacts to the water resource may have longer-term financial implications and threaten our business model, including our ability to expand or develop new resources and inhibit the delivery of social value.
The cumulative impacts resulting from multiple users of the water resource within a catchment may exacerbate the potential community, environmental and business impacts discussed above.
We seek to manage potential impacts to the water resource, including the environmental, community and business impacts, through:
- ongoing and regular stakeholder engagement to ensure effective collaboration
- compliance with water allocation permits
- targets for reduced freshwater use
- participation in catchment-level reviews and regulator assessments to understand and improve technical knowledge, challenges and interactions at a catchment level
- ongoing monitoring and measurement of water (quality, quantity), including maintaining a water balance
- understanding baseline and reference characteristics of water resource and movements
- predicting the impacts using technical models and testing of water management options should impacts occur
- water recovery or source substitution
- integration of the commitments in our Water Stewardship Position Statement and pillars of our Water Strategy into business strategy, planning, decision processes and performance reporting
- integration of water management practices into operated asset business planning
- identification and where feasible, implementation of opportunities for reduced water use
- where practical, ongoing monitoring of flora and fauna and other indicators of environmental health
- human rights impact assessments
- undertaking WRSAs involving stakeholder engagement
See more information on how BHP engages with communities.
BHP undertakes ongoing assessment of baseline conditions at a catchment level and the potential direct, indirect and cumulative impacts of our operated assets on the baseline condition. Climate change science must be factored into this assessment. For more information, see the Our Requirements for Environment and Climate Change standard.
Our Water Stewardship Strategy includes a collective action and a disclosure pillar, both of which focus on water governance and collaborating with host communities, government, industry peers and other stakeholders.
While BHP does not have the ability to directly manage all catchment risks, we need to maintain a focus on management of our contribution to the risk and commit to participate in collective approaches to ongoing catchment governance. For example, we have worked with the CSIRO to assist with Ningaloo Reef public data collection, and we actively participate with the Fitzroy Basin Association and Queensland Reefs group, which both do public education. We have undertaken WRSAs within the regions where we operate, which were completed by a third party and involved a review of public information and stakeholder engagement to determine the shared water challenges in the catchments where we operate.
Closure Scope Risk associated with water management and post-closure obligations for operated assets that are closing or have closed, which can cause water quality (within the BHP footprint and beyond) or water accumulation issues. Potential impacts Ineffectively managed operational water-related closure risks may adversely affect the environment (for example, contaminants in surface and groundwater, changes to landforms), communities, public safety and our costs associated with managing water now and over the long term. Management
We seek to manage our potential water-related closure risk through effective closure planning. This planning is an important control across BHP’s operated assets. Closure plans should consider issues such as pit void lake formations, acidic and metalliferous drainage and saline water accumulation, and potential impacts to both surface water and groundwater. For legacy assets, (legacy assets refers to those BHP-operated assets, or part thereof, located in the Americas that are in the closure phase), controls may also be similar to those for the dewatering, extreme weather and water quality risk areas.
See more information on our approach to closure.
For more information on the financial provisions relating to closure liabilities, refer to the BHP Operating and Financial Review 9 – How we manage risk.
Compliance Scope Risk associated with changes in the regulatory settings, including the nature and extent of regulation related to water allocation, permits, tariffs and reporting obligations.
Our operated assets function in mature regulatory environments for water and regulation compliance requires constant vigilance.
The regions where we operate have reasonably mature regulatory systems for water extraction, use and discharge, although their approach and requirements vary by operated asset and jurisdiction. Typically, we are granted a licence to extract a prescribed quantity of water for a defined period and to discharge water at certain quantity limits and quality standards. These limits and standards are determined by relevant local regulatory authorities.
Potential impacts Alleged or actual non-compliance could result in adverse impacts ranging from lower-order infringements through to financial penalties, enforcement orders or proceedings, social activism or increased cost to BHP.
Environmental impacts may result in regulatory breaches or legal liability.
Compliance, monitoring and reporting requirements are usually defined through permits and licences. In addition to local regulation, we apply a range of internal standards. Please refer to Water Governance for a detailed overview of these. There are a few instances where water use and discharge may not be regulated via licences or permits. Our internal standards require that, in these instances, BHP follows relevant local guidance e.g. Australian and New Zealand Environment and Conservation Council (ANZECC) Water Quality Guidelines or the International Convention for the Prevention of Pollution from Ships. Application of these guidelines typically requires consideration of the water quality in receiving waterbodies.
Ongoing engagement with regulators helps to understand their priorities, how regulatory requirements apply to our operated assets and at a catchment level address existing non-compliances regarding surface water and groundwater.
Dewatering Scope Risk associated with management of dewatering activities and surplus mine groundwater and surface water (such as levels, volumes and pressures).
Many of BHP’s ore bodies are below the natural groundwater level and to access the ore we need to pump water to reduce the groundwater levels in order to access the ore bodies safely.
Dewatering is an important activity that supports mine production, by enabling access to ore located below the water table or enabling access to ore by supporting pit stability.
Potential impacts Dewatering can potentially impact geotechnical stability and safety, water supply, excess water management, the environment, communities and production. Management
We seek to manage the risks associated with dewatering through:
- mine planning
- maintaining an operational and predictive water balance
- defining dewatering and depressurisation targets
- monitoring and reviewing performance metrics
- environmental impact assessments
- managing excess/surplus water (such as the re-injection of excess water to local aquifers, where possible)
- ongoing hydrology assessments to inform planning
Extreme weather Scope Risk associated with extreme weather can cause drought, snow or flood events and may arise from acute (event-driven, including increased severity of extreme weather events) or chronic (longer-term changes) to climate cycles. Potential impacts Extreme weather events may contribute to adverse production, environmental, community and reputational impacts. For example, ineffective management during drought conditions may constrain production due to limitations on water availability. Ineffective management of excess water also has the potential to affect geotechnical stability and safety, prevent site access, cause injuries or fatalities or physical damage to infrastructure due to flooding and affect the environment, communities and production. Infrastructure damage may result in adverse impacts to communities where we operate where BHP supplies services such as power, drinking water or waste water treatment services directly to communities.
Management The protection of our workforce from the potential impacts of extreme weather forms part of the overall management of health and safety risks and is discussed within our health and safety disclosures. We seek to manage potential impacts including through:
- use of forecasting tools and monitoring of extreme weather events to help inform appropriate infrastructure design and operation and assist in timely and appropriate management
- establishing design criteria for surface water infrastructure, which consider the rainfall intensity and duration (including extreme weather events analysis)
- building integrity within the infrastructure including, where required, additional measures designed to ensure integrity for those facilities located in areas of higher basin risk due to the presence of cyclone, tropical storm, drought and/or flood hazard events
- Emergency preparedness, communications systems and adequately trained staff. For example, operated assets test the effectiveness of emergency preparedness for extreme weather events by undertaking emergency drills that include external agencies, such as regional fire and police as well as internal BHP resources
Marine Scope Risk associated with the alteration in marine water quality (sea or coastal areas), water or seabed levels or biophysical changes to marine environments.
Marine ecosystems are susceptible to impacts resulting from changes to the physical (e.g. temperature and pH) and chemical (metal, hydrocarbon concentrations) parameters of the water body.
This risk can arise from significant or catastrophic loss of containment of hydrocarbons within Petroleum operated assets, discharges from desalination facilities or from port facilities located in proximity to communities and/or key marine areas.
Potential impacts Due to regional differences in marine ecosystems and potential cumulative impacts, the type and extent of potential impacts to the marine environment for each of our operated assets may be different and could result in increased costs for mitigation, offsets or financial compensatory actions or obligations.
Potential adverse impacts include water quality impacts due to loss of hydrocarbon or chemical containment. Impacts to water quality have the potential to affect both the environment and communities.
Brine discharges at desalination facilities may result in the alteration of marine ecosystems.
Loss of containment or other major incidents may affect BHP’s licence to operate and/or production.
Controls for hydrocarbon containment include:
- pressure relief systems
- engineering design specifications
- operational procedures (e.g. job risk assessments, management of change, equipment performance standards, inspections and audits)
- passive protection
- oil plume modelling to inform potential impacts, and controls to avoid or minimise potential or actual impacts
- continuous monitoring during operations
Mitigating controls include:
- communication and emergency drills
- preparedness plans and emergency systems
Controls for desalination and port facilities include:
- ongoing maintenance of critical equipment
- monitoring and technical studies
- stakeholder engagement
To help avoid or minimise potential or actual adverse impacts associated with smaller discharges in marine environments, treatment, sediment, erosion, dust minimisation and other collection and/or treatment systems are utilised.
Tailings Scope Risk associated with the design, operation, maintenance, governance and reliability of tailings storage facilities. Potential impacts Potential adverse impacts arising from the ineffective management of tailings storage facilities (TSFs) can range from seepage and interrupted production to catastrophic failure incidents with the potential for multiple injuries and fatalities, widespread environmental damage and extensive community disruption and potential damage to community infrastructure, businesses and livelihoods, with flow-on financial and reputational impacts. Management
In FY2019, we introduced mandatory minimum performance requirements for TSFs that govern how we manage TSF failure risks across BHP and outline applicable processes, including business planning, risk assessments, and management of change. We have updated our minimum performance requirements for TSFs (see the Our Requirement for Tailings Storage Facilities standard) and associated internal guidance to align with the Global Industry Standard on Tailings Management (GISTM). For more information on tailings refer to our Tailings Storage Facilities webpage.
Water access, sanitation and hygiene (WASH) and water-related human rights Scope Risk associated with providing access to safe and reliable drinking water (potable water) and appropriate sanitation and hygiene facilities, including availability of appropriate water infrastructure to supply WASH facilities.
The remote nature of many of our operated assets means BHP can sometimes contribute to improved access to water and sanitation as we are often the sole supplier of water to our workforce for drinking and sanitation, and the manager of effluent. This role sometimes extends to neighbouring communities.
Potential impacts Ineffective WASH practices and infrastructure may result in the inability to provide the required quantity and quality of drinking water or sanitation. This may result in illness and potential fatalities, and could also disrupt our operated assets, impact communities and the environment, have adverse financial and reputational impacts and inhibit the delivery of our social value proposition. Our operated assets also have the potential to affect the cultural and spiritual values associated with water resources, including potential human rights breaches. Management
Understanding the baseline quality of the water we receive, the performance of our treatment plants and monitoring the water produced are our WASH priorities.
Our Water Stewardship Position Statement commits us to uphold the basic human right to water access and sanitation within our operations and to contribute to realising this right within communities. We do this by seeking to ensure members of our workforce have access to clean drinking water, gender-appropriate sanitation facilities and hygiene at our workplaces and within our communities where we are the supplier of these services.
We have global drinking water standards that our operated assets are required to meet (see the BHP Operating and Financial Review 7.16 - Water). Other controls include appropriate infrastructure that is constructed, designed and operated to meet external water quality standards by suitably qualified persons and is regularly maintained, inspected, monitored, with exception reports and responses, emergency response and business continuity planning.
Regular maintenance of water infrastructure, such as treatment plants, pipelines and tanks, is critical to ensure that water is adequate for our operated assets, both in quantity and quality.
Human rights impact assessments (HRIAs) are a control applied in certain circumstances to assess both direct impacts to the workforce and local communities, as well as potential impacts to other human rights, such as Indigenous, spiritual and cultural rights. All operated assets are required to undertake and review HRIAs regularly.
Water quality Scope Risk associated with changes in the chemical attribute of water, which may occur from runoff or seepage (including from exposed ground, pit slopes, waste rock), infiltration from water, tailings and process facilities, infrastructure, and increases in salinity due to long-term storage of water. Potential impacts Changes to the quality of water that runs through or under an operated asset can affect the surrounding groundwater resources and streams. This can affect other water users and the environment. Changes in water quality can also constrain production or result in water accumulation over time (due to discharge restrictions), which makes management during extreme rainfall events more challenging. This risk can persist for years after mining activity has ceased.
Management of water quality risks requires an understanding of what contributes to changes in water quality, how this may affect sensitive receptors within the environment and/or communities, and the appropriate management measures required. Controls include:
- avoiding contact with substances that may affect water quality
- appropriate design, construction and monitoring of facilities to prevent and detect contamination
- preventing or minimising adverse impacts through treatment and monitoring of water quality outcomes, so that the effectiveness of controls is understood and can be reviewed as appropriate
Water security Scope Risk associated with current and future balance between water supply, including the capacity and reliability of water supply infrastructure, and demand for all relevant users and related to the ecosystem function. A continuous and sustainable water supply is critical to our operated assets including provision of sufficient and well-maintained water infrastructure. Potential impacts An inability to secure water access can constrain production, and have regulatory, legal and financial implications. It may also adversely impact the environment or community, which was discussed as part of the Catchment risk area of this table.
Insufficient or poorly maintained water infrastructure can result in the inability of water infrastructure to supply the required quantity or quality of water necessary for our operated assets. This can result in reduced production and other adverse impacts, including to the long-term viability of our operated assets.
The level of risk is dependent on location and climate impact, water availability and supply. For example, availability has been a risk at New South Wales Energy Coal in the Hunter region of eastern Australia due to extended periods of below-average rainfall.
An adequate understanding of technical aspects of the water resource, hydrological conditions and/or long-term changes in water availability and management is critical to ensure ongoing supply. In addition, understanding demand through water balances, predictive modelling and monitoring is central to effective water security.
Many of the controls in place for the management of catchment risk are applied for management of water security risks. Please refer to controls listed above for the Catchment risk area of this table.
We seek to use lower-quality water where feasible and recover and recycle water to reduce freshwater requirements.
Water infrastructure needs to be:
- designed and constructed to meet internal and external standards
- regularly inspected and maintained
- operated within set parameters
- regularly monitored with processes to respond to monitoring
Regular maintenance of water infrastructure, such as treatment plants, pipelines and tanks, is critical to ensure that water is adequate for our operated assets, both in quantity and quality.
Climate-related risks are discussed in many of the risk factors in the BHP Operating and Financial Review 9 – How we manage risk. From a water-related risk perspective, climate change can be considered as a potential amplifier of existing risks as it may increase their likelihood and/or severity or could result in new risks. Potential direct water-related impacts resulting from climate change may include changes in precipitation patterns, sea levels, storm intensities, temperatures and frequency and/or severity of natural disasters (such as floods or droughts).
Indirect potential impacts of these changes may include coastal erosion, storm tide inundation, and production of toxic microorganisms and, over the longer term, reduced rainfall could create water security issues while increasing the need to manage excess water. Assessments of the potential impact of future climate change policy and regulatory, legal, technological, market and societal changes on water-related risks have a degree of uncertainty given the wide scope of influencing factors and the countries where we do business. Under our mandatory minimum performance requirements for risk management, material risks are required to be reviewed periodically to evaluate performance. These reviews are designed to ensure that developments in climate change science and policy and other relevant regulatory, legal, technological, market and societal factors, including areas of uncertainty, are considered annually in our evaluation of operational water-related risks.
Our operated assets are required to apply BHP’s Risk Framework and the Our Requirements for Environment and Climate Change standard to identify, assess and manage physical climate change risks including options to build climate resilience into their activities, for example, by designing new facilities to withstand projected sea level rise or changing climate patterns, or factoring forecast increases in extreme weather events into operated asset-level plans. We are progressively implementing full physical risk assessments under our Adaptation Strategy and intend to report on specific material physical risks and potential financial impacts in future years. We also require investment and growth opportunities to undertake analysis of climate-related risks. For more detail, see the BHP Climate Change webpage.
Examples of significant operational water-related risks
Catchment-level risks are classified as Tier 1 across all of our mining operated assets as the nature of these assets coupled with their physical context has the potential to significantly and adversely impact water resources and related environmental and/or social values. This may arise because of direct impacts either from BHP’s operated assets or from the cumulative impacts from our activities combined with those of others within a region.
For example, WAIO in the Pilbara region of Western Australia is located alongside other mining companies’ facilities. The cumulative effect of combined activities has the potential to impact groundwater that supports local ecosystems and has important spiritual and cultural significance for Indigenous communities.
To better understand potential impacts, WAIO conducted a strategic environmental assessment that took a regional approach. A key element of the assessment was to understand the potential cumulative adverse impacts and management strategies associated with surface water and groundwater. An analysis was also undertaken to identify key, water-dependent environmental features within the upper Fortescue River catchment.
This innovative approach allowed WAIO to develop proactive, outcome-based management actions to cumulative-impact risks. These actions now inform short- and long-term operational planning to avoid and minimise adverse impacts to water-dependent environments.
In FY2022, the majority of our operated assets undertook a WRSA in line with the Our Requirements for Environment and Climate Change standard. This process involved third party review of publicly available information and stakeholder engagement by the third party to determine the shared water challenges in the regions where we operate. This involved active engagement with various stakeholders such as other industries, local, regional and state government agencies, civil society organisations, public authorities, local community members and other interested parties who may influence or be influenced by our site water use and activities.
Outcomes from these WRSA can be found here.
- Reducing reliance on groundwater at Escondida
- River Health Partnerships in Queensland, Australia
- Martulu-Palyalu Project
Please refer to our ‘Managing excess water in the Pilbara’ case study for an example of how BHP manages dewatering risks.
Extreme weather risk
Extreme weather risks are required to be managed at the operated asset level. These risks have been identified for FY2022 as Tier 1 at WAIO (cyclones), Escondida (extreme precipitation events), Pampa Norte (extreme precipitation events), BMA and BMC and New South Wales Energy Coal (variable rainfall including extreme rainfall and cyclones and periods of drought) and Petroleum (cyclones).
The climate at our BMA operated assets is characterised by wet season rainfall, which includes tropical cyclone events that produce most of the annual rainfall and a dry season during which little rainfall occurs.
The management of mine-affected water (MAW) is one of the key operational water-related risks for BMA. MAW is rainfall runoff, including the large volumes obtained during storm events, from active mining areas and other water that has been used in the mining process. MAW is typically stored in mine pits and dams. Over time, this water may become more saline due to evaporation or it may have increased suspended solids due to wash-down or erosion from surrounding mining activity. MAW is used for dust suppression and coal washing. Too little MAW may limit production and excess water may obstruct access and limit production in operational pits.
Water management activities aim for the balance between too much and too little water on each site. This allows sufficient storage for runoff from rainfall events, while not affecting production and not allowing unauthorised site discharge of MAW. Discharge of MAW needs to be managed in accordance with licence conditions, which in some cases may require management of MAW prior to discharge. Appropriate management should avoid or minimise out-of-season flow in ephemeral creeks and rivers, which has the potential (if not controlled) to increase sediment and salt loads.
Due to ongoing extreme rainfall events, excess water management is central to BMA’s (and BMC’s, prior to divestment) operating strategy. Some BMA sites still hold excess water after the 2011 and 2013 floods and tropical cyclone Debbie in 2017. One way we seek to manage this is to move MAW from sites with water excess to sites that have too little water. A further control is to avoid the accumulation of additional water from excess rainfall events. BHP undertakes detailed studies on an ongoing basis that assess the benefit and cost of various options to manage excess water and seek to ensure that the design of infrastructure in flood prone areas remains adequate for the level of flood risk.
Ongoing modelling and simulations are used to inform appropriate flood risk mitigation activities, which include construction of flood levees and preparation of emergency evacuation plans.
Climate change has the potential to heighten these extreme weather risks and introduce new ones.
Water access, sanitation and hygiene risk
Water access, sanitation and hygiene (WASH) is a Tier 1 risk at all operated assets where drinking water and sanitation facilities are provided for the workforce and/or communities.
The remote nature of many of our operated assets means that BHP is often the supplier of water for the purposes of drinking and sanitation, and the manager of effluent with respect to our workforce. In some instances, BHP has agreed to arrangements that extend this role beyond our operated assets to our neighbouring communities.
In such circumstances, we are committed to providing access to safe and reliable drinking water (potable water) and appropriate sanitation and hygiene facilities.
For example, WAIO provides drinking water to the community of Newman, five operational mining areas and one closed mine, and supplements supply to our operations at port and rail. Therefore, management of this water is critical to our activities and surrounding communities. To manage this risk, WAIO adopted a management system approach based on ISO 9001, which integrates World Health Organisation (WHO) and the Australian Drinking Water Guidelines requirements, as well as a number of additional standards to enable a holistic approach to drinking water safety and infrastructure management.
Our operated assets also have the potential to affect the cultural and spiritual values associated with water resources. Where relevant, BHP engages with local and Indigenous communities to understand and seek to avoid or minimise potential or actual adverse effects to cultural and spiritual value.
Water quality risk
BHP activities have the potential to alter the natural or background water quality within the catchments where we operate. Water quality may be adversely affected by discharges into surface, sea or groundwater streams or increases in salinity may occur via evaporation from our water storage facilities.
Our current operations and legacy sites are in jurisdictions with mature regulatory regimes. As a result priority substances within our discharges typically are identified during, and regulated by, our licencing and permitting process in discussion with regulatory agencies. This process generally relies on public information regarding potential toxicity, ecological and health criteria for priority substances, and where available information pertaining to background levels of priority substances within the region of the operations, to determine discharge limits. Monitoring and reporting requirements for priority substances are also typically defined by permits and licences. BHP installs treatment equipment where water discharge is planned and agreed limits may not be met in the absence of treatment.
Where discharges are not regulated via licences or permits, we need to use a risk-based approach to determine potential monitoring for priority substances. This approach requires evaluation of both the volume and quality of the discharge and that of the receiving environment. Baseline or reference conditions for water resources within each operated asset’s area of influence are required to be set, and an assessment of potential impacts to these are required to be undertaken as outlined in the Our Requirements for Environment and Climate Change standard. Where potential adverse impacts identified include contaminants being introduced to a receiving environment at levels above those already present, appropriate monitoring programs for these discharges need to be developed and criteria set (e.g. triggers and thresholds). These criteria are informed by relevant local guidance that outlines potential health (if applicable) and or ecological impacts e.g., Australian and New Zealand Environment and Conservation Council (ANZECC) Water Quality Guidelines, the Department of Water and Environmental Regulation – Guideline - Assessment and management of contaminated sites or the International Convention for the Prevention of Pollution from Ships (MARPOL).
As of the end of FY2022, just under 60 per cent of global water discharge from BHP’s operated assets is from our desalination activities at Escondida. Our Petroleum operated assets (prior to completion of the merger of our Petroleum business with Woodside Energy Group Ltd (Woodside)) accounted for 38 per cent of our global water discharges for FY2022, consisting of discharge production formation water (which is the water withdrawn as part of crude oil recovery). Both the Escondida and Petroleum asset discharges are to seawater and are regulated under government issued permits that include discharge limits. Other sites that had water discharges in FY2022 are shown in the water performance section below and in our ESG Standards and Databook. None of our operated assets discharge untreated effluent from waste water treatment plants to any water streams.
Please refer to our 'Island Copper' case study for an example of how BHP manages water quality risks.
Please refer to our 'Beenup Titanium Minerals Project' Closure case study for an example of how BHP manages water risks in relation to closure.
Water-related risk in the value chainWater-related risks can indirectly affect operations via our value chain, from supply to operated assets to customers. For example, floods in one part of the world may affect supplies of a critical input or item of equipment necessary to sustain our operated assets. Additionally, tightening regulation around water discharges in a particular country or region may constrain our customers’ manufacturing operations. This may have flow on effects to our ability to sell certain commodities.
BHP has potential exposure to water-related risks across its value chain and climate change may increase our future exposure. Customers and suppliers may be exposed to areas of high to extremely high water stress. Many are also located in areas with a higher likelihood of flooding. We need to understand these factors and respond to the challenges, working with our customers and suppliers.
BHP undertook an evaluation of our value chain in FY2018 to identify customers and suppliers with potential water-related risks. This highlighted a concentration of suppliers and customers in China that may be exposed to water-related risks. Commencing in FY2019, we began a more detailed evaluation, using BHP’s Risk Framework, of value chain water-related risks in this region. In FY2020, this evaluation identified suppliers in China operating within areas of water stress and potential partners for water collective action projects.
In FY2021, we extended the scope of intelligence gathering to other regions where our suppliers operate. This is furthering our understanding of opportunities to work with suppliers and customers to better manage water-related risks within our value chain.
For further information on value chain initiatives please refer to Value Chain.
Non-operated assetsFor information on BHP’s interests in companies and joint ventures that we do not operate, refer to the non-operated joint ventures (NOJVs) information in the BHP Operating and Financial Review 7.18 - Tailings storage facilities; and 9 – How we manage risk.
Water stewardship is as vital for our NOJVs as it is for our operated assets.
We engage with our NOJVs to better understand their management of water-related risks.
We have worked with Antamina and its shareholders to secure Antamina’s commitment to align with ICMM Mining Principles.
For more information regarding the Samarco NOJV, refer to the BHP Operating and Financial Review 8 – Samarco.
Water management can create opportunities
BHP recognises that our positive environmental performance (including water stewardship) contributes to social value and the resilience of nature.
Effective water-related risk management can contribute to long-term business, social and environmental benefits, such as:
- increased productivity
- improved community benefits and resilience
- improved water disclosure and governance
- becoming a partner-of-choice to governments and communities in new and existing jurisdictions
- access to resources by obtaining and retaining rights to operate and expand our current operated asset base
- reduced liabilities and long-term legacy issues
- increased long-term business resilience
An example of an opportunity from effective risk management is how WAIO manages dewatering. Dewatering at WAIO produces more water than is required for mining activities. This surplus water is a valuable resource and WAIO’s preference is to implement a controlled return of this water to aquifers through a managed aquifer recharge process. This approach has a number of benefits. It seeks to preserve the water resource for future use by BHP or other parties, minimise our environmental footprint, promote resilience of water resources and the environment and place less impact on the cultural heritage values of the surrounding landscape, which has been an important consideration for Traditional Owners.
BHP’s Water Stewardship Strategy seeks to leverage technology solutions to prevent or significantly reduce adverse water-related impacts, increase water efficiency and deliver benefits beyond our operated assets.
We have developed a roadmap of potential water technologies. This roadmap identifies emerging and long-term challenges and strategic opportunities to resolve these through technology and innovation. The roadmap was developed by overlaying operated asset-level water-related risk with the water stewardship vision and objectives to leverage technology solutions that drive a step-change reduction in water-related risk and realise value creation opportunities. Some examples of technologies and initiatives that are included in the roadmap include:
- Olympic Dam tailings decant water treatment for reuse and to partially offset Great Artesian Basin supply
- Escondida tailings storage facility water recovery/treatment for reuse
- BMA mine-affected water treatment for reuse or discharge
Please refer to our Technology case study for more information.
The completion of WRSAs at our operated assets, in consultation with relevant stakeholders, has identified further opportunities to collectively address shared water challenges within the regions where we operate. For more information see Shared Water Challenges.
For more information on water-related opportunities for creating social value, refer to social value.
- increased productivity
We have a range of core business processes, requirements and guidance materials that apply to our management of water at Group- and operated asset-levels. These include:
- our corporate planning, scenario, strategy and investment evaluation processes
- standards such as Our Requirements and other mandatory minimum performance requirements including those on risk management,
- environment and climate change, closure, human rights, community and stakeholder engagement
- target setting
- water accounting
- audit and assurance
- technical water management standards
The Our Requirements for Environment and Climate Change standard requires that our operated assets establish baseline water conditions, identify water-dependent receptors, water uses and stressors, and seek to predict changes to these conditions, including the potential impacts of climate change, for the ‘life of asset’.
Our operated assets are also required to determine their contribution to the current and future cumulative impacts and define thresholds and controls (e.g. environmental effects monitoring) to manage catchment-scale impacts, develop and review water forecasts over the life of asset, undertake a WRSA and develop operated asset-specific, context-based water targets. A situational analysis is an analysis of the water resources and catchments that the operated asset interacts with, including consideration of:
- the sustainability of the volume and quality of the water resources, and related environmental, social or cultural values considering
- interactions of all parties and climate change forecasts
- the state of water infrastructure and WASH of local communities
- the environmental health of the water catchments that feed the water resources, considering the extent of vegetation, runoff, and any conservation of the area
- external water governance arrangements and their effectiveness.
BHP has developed technical standards that set minimum standards for water management across its operated assets. These standards include the requirements for all operated assets, including legacy assets (legacy assets refers to those BHP-operated assets, or part thereof, located in the Americas that are in the closure phase), to implement measures to avoid or minimise potential or actual adverse impacts to water resources and water-dependent ecosystems, communities and cultural values. The standards require development of:
- plans that incorporate initiatives that substitute, reuse and reduce our reliance on and potential adverse impacts to fresh water
- water balances that consider all primary water inflows, uses, treatment, storage, losses, diversions and discharges
- plans for management of excess water (storm water, dewater and runoff) to ensure that a minimum tolerable level of impact to the receiving environment is achieved
- documentation of potential and known sources of groundwater and surface water contamination across the exploration, project, operating and closed sites
- a risk-based management program where there is potential for groundwater or surface water contamination or water quality impacts. The program must characterise the type, distribution and fate of contamination and establish water quality performance criteria in operational management activities (e.g. for excess water release or treatment)
BHP has established cross-functional teams to implement our approach to water stewardship at Group and regional levels. These teams include representatives from Planning; Engineering; Strategy; Health, Safety and Environment; Community; Corporate Affairs; Operations; Risk; and Legal.
More detail on the Group-level processes and requirements and how they apply to water-related risks is set out below.
Existing process Application to water
BHP has a corporate alignment planning (CAP) in place designed to implement long-term Group strategy. The CAP process guides the development of plans, targets and budgets to deploy capital and resources.
The planning process seeks to deliver an understanding of our projected production levels and water requirements over decades. Risks (both threats and opportunities) are required to be identified and assessed against social, environmental and economic considerations. For example, for some operated assets, access to ore is dependent on effective water management, therefore wat
BHP assesses how divergent policy, technology, market and societal outcomes could impact our current portfolio. We undertake ongoing monitoring of the macro environment that seeks to re-assess the resilience of our portfolio because we recognise the world could respond in a number of different ways.
We undertake ongoing assessments of changes to legislation that identifies water as a national security interest; changes in valuation and cost of water; water-related legal or regulatory action against companies; changes in ocean heal
BHP has a Capital Allocation Framework (CAF) that is designed to maximise shareholder value.
While our current investment evaluation process includes a qualitative assessment of sustainability risks (both threats and opportunities), we recognise there is room for greater understanding of water in future assessments. Our Water Stewardship Strategy includes an assessment of the adequacy of the current process (see progress against Water Stewardship Strategy in the water performance section below.
Dam safety reviews are mandatory as part of the Our Requirements for Tailings Storage Facilities standard. The reviews are based on the Canadian Dam Association’s recommendations and include an evaluation of hydrogeological conditions that may influence dam stability.
For more information on tailings dam management, refer to the BHP Operating and Financial Review 7.18 - Tailings storage facilities and the tailings storage facilities webpage.
Our Requirements standards
BHP has a number of Our Requirements standards that outline Group-wide mandatory minimum performance requirements. They are supported by technical standard and guidance documents.
The Our Requirements for Environment and Climate Change standard and the Water Management Standard are key documents that set mandatory minimum performance standards for water management and outline both Group-wide and operational-level requirements.
At BHP, management of risk is central to creating long-term value. Our mandatory minimum performance requirements for risk management form part of our Risk Framework and outline BHP’s risk process that includes steps for risk identification, assessment, treatment, monitoring and review, and communication, including specific requirements for material risks. Risks are subject to internal and, in some cases, external evaluation of effectiveness of controls.
Water-related risks are required to be identified, assessed and managed in line with BHP’s Risk Framework, as outlined in our water-related risk content on this webpage and in the BHP Operating and Financial Review 9 – How we manage risk. Our understanding of water-related risk is increasing over time as discussed in our water performance and water-related risk content on this webpage. BHP’s risk processes assist in monitoring and assessment of the implementation of our Water Stewardship Strategy and support the observation of global trends for water availability.
The Our Requirements for Environment and Climate Change standard takes a risk-based approach to managing water-related risks.
All our operated assets must understand baseline conditions at a catchment level and the potential direct, indirect and cumulative impacts of their operations on these conditions. Climate change science must also be factored into this assessment.
The Our Requirements for Closure standard requires closure considerations to be built into management and decision-making throughout the life cycle of our operated assets to minimise longer-term risk and liabilities and identify and harness opportunities.
Each operated asset is required to develop a Closure Management Plan that covers the life of asset to minimise closure-related risk, including those that are water-related, and include long-term monitoring to verify the effectiveness of controls and maintain performance standards.
We aim to identify and manage human rights risk in BHP activities and processes via human rights impact assessments and integration with our Risk Framework.
Our Water Stewardship Position Statement recognises water access and sanitation as basic human rights. We require our operated assets to assess potential direct impacts on people, the interrelationship with other human rights, such as Indigenous, spiritual and culture rights, and specific implications for vulnerable and or marginalised groups. The right to water and sanitation entitles everyone to sufficient, safe, acceptable, physically accessible and affordable water for personal and domestic use and the provision of sanitation facilities that offer privacy and dignity. Our operated assets are required to identify and document potential human rights risk by undertaking human rights impact assessments. For more information, see Human rights.
Community and stakeholder engagement
Understanding the needs and concerns of communities and other stakeholders is fundamental to water stewardship. The long-term nature of our operated assets means it is critical we make effective and genuine connections with people that can be sustained over time.
Our Water Stewardship Position Statement commits us to listening and learning from others to better understand and continuously improve our approach to water stewardship and to work with others to make progress towards addressing shared water challenges.
Refer to the BHP Operating and Financial Review 7.10 - Community and Community for information on community and stakeholder engagement practices.
For more detail on water stewardship specific engagement, please see the water performance section below.
Climate change adaptation planning
Our long-life operated assets require a robust, risk-based approach to adapting to the potential physical impacts of climate change. Effective analysis of regional climate science is critical to inform our resilience planning at an operated asset level and improve our understanding of the climate vulnerabilities our operated assets may face.
We have set minimum requirements in BHP's Our Requirements for Environment and Climate Change standard that our operated assets need to address to understand and plan for climate mitigation and adaptation. Many of these relate to water security and water scarcity.
Audit and assurance
Our Internal Audit and Advisory (IAA) team evaluates the design and effectiveness of our processes and management of material risk, including water-related risks. These results are considered in the development of plans to address improvements where required.
IA periodically undertakes a review of material water-related risk and performance data to improve our understanding and consistency of approach to water management.
External third-party assurance providers routinely evaluate our water data and processes to assist us in accurately representing our commitments and action. Refer to the assurance statement in the BHP Appendix 4E.
We have publicly reported our water withdrawals and discharges for more than 15 years, since the establishment of the Minerals Council of Australia’s Water Accounting Framework (WAF).
We transitioned our reporting in FY2019 to align with the ICMM ‘A Practical Guide to Consistent Water Reporting’, an international accounting framework which enables comparable water data across the mining and metals industry, and in FY2022 we have aligned our reporting with the updated ICMM guidance entitled ‘Water Reporting Good Practice Guide (2nd Edition)’. BHP contributes to improve mining sector water reporting by helping to strengthen ICMM guidance and by sharing our experience of water accounting in the mining sector. For example, in FY2021 we participated in a working group that provided input to ICMM on potential improvements to water reporting guidance.
The ICMM guidance and the WAF make use of a site water balance to establish a water account. The water balance approach is commonly used in hydrological studies to determine the flow dynamics of a system. A site water balance is a simplified water account where all water components are classified and those with common characteristics (e.g., consumed via evaporation) are aggregated to the highest possible level. The use of a water balance allows the generation of consistent site metrics for external reporting and provides a tool for effective water management for the mining sector. Site water balances are a live management tool that should be reviewed and updated on a regular basis.
A generalised water balance ‘equation’ requires water inputs to equal the outputs plus any change in storage. That is: water withdrawals/inputs = water discharges + water consumption +/- change in water storage.
Water balance information has a variety of sources with differing degrees of accuracy. Following the WAF, information is classified as of high accuracy when measured directly or there are simulations with good accuracy over many reporting periods, or a forced balance in flows, medium accuracy when modelled or simulated using estimates based on historical data or co-efficients. Information is classified as low accuracy when estimated or simulated using general co-efficients.
We recognise that water balances contain a degree of uncertainty and that, over a given period, the reported withdrawal may not be in balance with the sum of discharge, consumption and net storage change. The ICMM guidance requires that, at a site level, the delta storage derived by mathematical balance broadly reconciles with the actual change in volume of water in storage over the same period. This infers that there is some allowance for uncertainty in the balance if actual changes are measured while other components of the balance are estimated, and comparison is considered a useful check for validating site data. Therefore, the balance should be reviewed and potential lags or uncertainties in the water system should be considered when assessing validity.
The general practice in the mining sector (in accordance with the ICMM guidance and WAF) is to force a balance in water accounts, such that withdrawals/inputs equal discharges plus consumption plus or minus change in storage, by creation of a balancing point, for example assumed evaporation or change in storage volumes.
We have elected not to artificially adjust any dimensions of the water balance to force a balance in water accounts at our coal assets (BMA and NSWEC), where storage changes are potentially large. At our coal assets, we have chosen to retain the calculated differences in the water balance and recognise that the differences represent levels of uncertainty within the water balance. This understanding of uncertainty is considered in our ongoing water management decisions and guides the ongoing improvement of our water balance models, which are continually developing as we apply new measurement points, enhanced measurement methods, and improved practices to estimate indirect data (for example the runoff from rainfall). This approach is aligned with the intent of frameworks including the ICMM guidance, WAF and GRI that recommend water balances be used as a live management tool that can identify ongoing improvement in water accounts.
In FY2022, we introduced the metric of change in water storage (where this is significant to the water balance), following a new recommendation in the updated ICMM guidance. In preparation for this change, we reviewed the accuracy of water storage information for our operated assets during FY2021. This process, and the trial of not forcing a balance at our coal assets, revealed a need for improvement in the measurement or estimation of a change in storage metric, as well as in estimation of evaporation and tailings seepage at our coal assets, where there can be large changes in storage volumes resulting from natural variation in runoff from rainfall. These runoff, evaporation and seeping volumes are difficult to measure and create uncertainty. An improvement program has been in progress during FY2022 and is expected to be completed in FY2023. There will continue to be relatively high uncertainty in the water balance of the coal assets until the key improvement program changes are complete and have had time to influence a substantial period of data. As we gain experience in measuring storage across all our operated assets, we expect to see uncertainty reduce, and there may need to be retrospective corrections to the data.
Our reporting metrics are in line with the ICMM guidance and defined in the BHP Appendix 4E Glossary, such that we report:
- water withdrawals (water intended for use by an operated asset) by source, by quality and by operated asset
- water consumption (water used by the operated asset) via the type of consumption (e.g., evaporated, entrained)
- water discharge (water returned to the environment) by destination, operated asset and quality
- other managed water (water actively managed by an operated asset but not used for any operational purpose) by quantity and quality
- water recycled/reused (water that is used more than once at the operated asset) by quantity and efficiency
- change in water storage (the net change in the volume of water stored over the annual period) for material water stores
In FY2021, we began to report the proportion of withdrawals, discharges and consumption that occurred in areas of water stress, as defined by the WWF Water Risk Filter physical risk ratings (See ‘BHP and basin risk’ in the ‘Water and risk at BHP’ section above for a full overview of this change).
In FY2022, we aligned our disclosure of other managed water (previously called diversions) to the updated ICMM guidance, which included the change in terminology and disclosure of this metric by both quantity and quality.
The WAF accuracy statement provides an indication of the accuracy for each metric by classifying them according to whether they are measured directly, simulated or estimated. We use the accuracy statement as one tool to assist in identifying areas for inclusion of more or improved flow measurement in our water balances that inform our water management decisions. This contributes to our commitment to continuous improvement in our water balances. Where possible, we endeavour to maximise direct measurement and minimise estimation. In FY2022, some of our operated assets increased their measurement of water volumes due to installation of new flow monitoring equipment (e.g., BMA discharge, Nickel West withdrawals, Escondida discharge), while others reviewed the accuracy of their water balance and subsequently extended their water balance granularity and, as a result, their current extent of measured flows reduced over the annual period. Based on our application of the WAF accuracy methodology, in FY2022 approximately 58 per cent of withdrawal and discharge volumes are measured for a majority of sources for the majority of the year, therefore this data is considered to be at a moderate accuracy level. We also recognise that the WAF accuracy statement is only a guide to data quality, and we have continued to make other improvements to the quality of our water data during FY2022.
We simulate or estimate elements that are challenging to measure directly, such as evaporation, entrainment of water in ore and waste, seepage from tailing storage facilities, and rainfall run-off quantity and quality. This focus on improvements in data quality and understanding, particularly at WAIO and BMA, has resulted in restatement of the FY2017 data that formed part of the FY2017 baseline for our FY2022 freshwater withdrawal target.
We seek to minimise our withdrawal of high-quality fresh water, which is water with low levels of salinity, metals, pesticides and bacteria and is relatively neutral (pH 6-8.5), and use lower quality or saline water instead. In FY2022, approximately 75 per cent of our water withdrawals consisted of water classified as low quality. The definitions for water quality types are provided in the BHP Appendix 4E Glossary, and a detailed description is available in section 2.2.4 WAF.
BHP has continued to group water quality into three categories in line with the WAF, as this provides more granularity than the approach of the ICMM guidance. Type 1 and Type 2 equate to high-quality water, while Type 3 equates to low-quality water under the ICMM guidance.
- water withdrawals (water intended for use by an operated asset) by source, by quality and by operated asset
Water performance summary
Water Strategy progress
Water Stewardship Strategy pillar What we did in FY2022 Manage risk
Effectively manage water-related risks (both threats and opportunities) at a regional level in the short and longer-term
In FY2022, our operated assets fully implemented critical control performance standards for each critical control for management of our water-related operational and catchment risks and continued to implement systems and processes to achieve full compliance with the water management standards. Water-related risks are managed in line with BHP’s mandatory minimum performance requirements for risk management. For more information on BHP’s Risk Framework, refer to the BHP Operating and Financial Review 9 – How we manage risk and the ‘Water and risk at BHP’ section on this webpage.
Effectively value water in investment and operational decisions by considering all beneficial uses of water
During FY2022, we integrated the non-financial values of water into a decision-making framework for BHP’s projects and planning processes. The framework is known as the Non-Economically Quantifiable Impact framework and will be introduced during FY2023. We also began to develop an approach to value natural capital, which will ultimately allow us to recognise the value of ecosystem services provided by water when making business decisions. Water stewardship remains a social value priority at all our operated assets.
Transparently disclose water-related risks, their management and performance at an Asset level and ensure our public profile reflects our performance
In FY2022, we updated our disclosures to be in line with the updated ICMM guidance and, where practical, other external reporting frameworks such as GRI and SASB.
Collaboratively improve regional water policy and governance and shared water challenges within our communities and across our value chain with all stakeholders
We continued a program of Water Resource Situational Analyses (WRSAs) in FY2022 to inform our post-FY2022 operated asset context-based water targets (CBWTs). Each WRSA identifies the shared water challenges in the region through stakeholder consultation and review of public information by a trusted third party (for example, a university). Once finalised, the WRSA reports will be publicly available at www.bhp.com/water to support continued collaboration between stakeholders.
We shared our approach to setting CBWTs at World Water Week in August 2021 and we published a white paper on it, with the aim of encouraging and supporting others on this path and ultimately helping to improve the management of shared water resources.
In FY2022, the Water Resilience Assessment Framework (WRAF) was released by the CEO Water Mandate. BHP initiated the WRAF project with the CEO Water Mandate and is its principal sponsor. The WRAF establishes a common basis to measure and improve catchment resilience, which is the ability of a water system to sustain its function through shocks and stresses like climate change or increased water demand. BHP continues to partner with the CEO Water Mandate to develop guidance documents for the WRAF.
During FY2022, we continued working with the University of Notre Dame to develop a practical and standardised tool for human rights assessment of water management that incorporates multiple dimensions of the right to water.
Learn and innovate
Proactively share, source, develop, and apply knowledge and technology to water management
We have identified a number of potential technologies for brine treatment and minimisation, Acidic Mine Drainage treatment, metal recovery and use of greywater that we are progressively assessing from concept to bench scale to large-scale trials with input from subject matter experts in the relevant fields. In FY2022, a number of trials progressed to bench scale and large-scale. We will continue to evaluate technological options, which we expect will result in a decrease in our overall withdrawal of new water.
BHP co-funds with Rio Tinto the Groundwater Modelling Decision Support Initiative (GMDSI), which continues to improve the standard of groundwater assessments and predictions through lifting global capability. The GMDSI is delivered by the National Centre for Groundwater Research and Training (NCGRT) at Flinders University, South Australia, and through a working group made up of 15technical experts. BHP chair the working group. The initiative promotes and supports the improved use of models in groundwater management, regulation and decision-making. In FY2022, the GMDSI delivered six online training courses and two fully worked examples with webinars, and undertook a survey of 80 state and federal regulators to assess the suitability of water models for the purpose of environmental approvals.
During FY2022, we undertook numerous stakeholder engagement activities related to water stewardship. The following table outlines the key stakeholders engaged, how they were engaged and the topics on which they were engaged.
Stakeholder Forum/topic Various local stakeholders in our operating regions, including community groups, Indigenous groups, government (local and regional), industry members and representative bodies, and research institutions
Engagement through various means to develop the WRSAs in our operating regions. We asked stakeholders what they value about water resources, and their views of the challenges and collective action opportunities to preserve those values.
ICMM BHP is a member of the Water Working Group (WWG) and sub-project committees. We actively support the identification and completion of the WWG’s priority projects, which currently focus on improving collective catchment management, operational water management, and water reporting.
CEO Water Mandate BHP is a signatory to the CEO Water Mandate and member of the Steering Committee. We support the CEO Water Mandate’s program and particularly promote the priorities for broader regional spread (e.g. into Asia-Pacific and South America), greater involvement of resource industries, linking water with climate change and biodiversity programs, and pragmatic approaches.
During FY2022, we partnered to release the Water Resilience Assessment Framework and progressed CBWTs with an approach based on that of the CEO Water Mandate (see Water Strategy Progress table for more information)
Minerals Council of Australia (MCA) BHP is an active member of the MCA’s Water Working Group. Through the MCA, we contributed to the Australian Government’s reviews of the National Water Initiative and the Environmental Protection and Biodiversity Conservation Act.
This section provides detailed disclosure of our various water metrics in line with the ICMM guidance. The water performance data presented here includes water data from the following divested operations: Onshore US assets until completion of the sale on 31 October 2018, BMC until completion of the sale of BHP’s interest in BMC on 3 May 2022; and operated assets in BHP's Petroleum business until the merger with Woodside completed on 1 June 2022). The exception to this is the removal of all data from the Onshore US assets, BMC and the operated assets in BHP’s Petroleum business for the assessment of our five-year freshwater withdrawal reduction target that concluded in FY2022, together with adjustments made and reported in previous years to ensure ongoing comparability of performance.
Definitions of water metrics, sources and types and detailed water data by asset are provided in our ESG Standards and Databook and in the BHP Operating and Financial Review 7.16 - Water.
BHP has continued to classify water quality into three categories in line with the Minerals Council of Australia’s Water Accounting Framework (WAF) as this provides more granularity than the ICMM guidance. WAF Type 1 and Type 2 water equates to high-quality water, while WAF Type 3 equates to low-quality water under the ICMM guidance.
In FY2021, BHP commenced use of the WWF Water Risk Filter to describe basin risk for our operated assets as discussed on this webpage under basin risk. Using the WWF Water Risk Filter, it was found that two or our 12 operated assets (17 per cent), as of the end of FY2022, are classified as being under high or very high water stress due to location. The total number of assets includes BMC and Petroleum operated assets, which were divested during FY2022. These are shown in our ESG Standards and Databook. The updates made by WWF to this tool during FY2022 did not change the number of assets classed as being in water-stressed areas from that reported in FY2021.
Water withdrawals represent the volume of water, in megalitres (ML) received and intended for use by the operated asset from the water environment and/or a third-party supplier.1,2 Since FY2021, we have reported third-party water withdrawals as a distinct category to align with reporting frameworks such as the ICMM guidance and GRI.
Water withdrawals for FY2022 across our operated assets increased by 12 per cent from FY2021 (from 438,660 ML to 491,740 ML) due primarily to an increase of withdrawal of seawater at Escondida and our Petroleum operated assets (prior to completion of the merger of our Petroleum business with Woodside) and increased surface water withdrawal at our BMA asset (due to higher rainfall events and inclusion of water that is withdrawn, stored and not used in line with updated ICMM guidance). Minor increases at Nickel West were offset by a minor decrease in withdrawal at WAIO. It should be noted that although currently immaterial to our global withdrawals, our Jansen Potash Project withdrawals increased significantly in FY2022 due to the increasing progress of construction of this project.
Our withdrawal of high-quality water (Type 1 and Type 2) increased by 34 per cent from 91,280 ML in FY2021 to 122,210 ML in FY2022. This represents a proportion of 25 per cent of total withdrawals. The increase was driven by the increase in withdrawal of surface water at our BMA asset due to higher than average rainfall events during FY2022 and the change in methodology to include volumes that are stored but not used as per updated ICMM guidance. Total water withdrawals from operated assets located in high or very high water-stressed areas (as determined by WWF Water Risk Filter) was 246,700 ML (50 per cent of overall withdrawals for BHP operated assets) but consisted of 99 per cent low quality (Type 3) water.
The majority of our water withdrawals (61 per cent) came from seawater, noting that some of the third-party water from Nickel West and Pampa Norte is also sourced from desalination facilities. Currently, most of Escondida’s operational water consumption is met by desalinated water.3 The proportion of withdrawals relating to groundwater across BHP’s operated assets remained relatively stable, from 23 per cent of withdrawals in FY2021 to 20 per cent of withdrawals in FY2022. WAIO and BMA account for more than half of ground and surface water withdrawal across our operated assets.
The withdrawals, and the material contributors to these, were within expectations for FY2022 and in line with our ambition to minimise our withdrawal of high-quality fresh water and replace these with seawater/low-quality withdrawals where feasible. As the results are within expectations, we do not anticipate any implications for current commitments, strategy or costs for the business with respect to water withdrawals. For more information on performance against our now completed public five-year sustainability target for freshwater withdrawal, see below.
1 Between FY2018 and FY2021, these withdrawal volumes included rainfall and runoff volumes captured and used during the reporting year but excluded rainfall and runoff volumes that had been captured and stored, and will be reported in the future year of use. Application of the updated ICMM guidance resulted in rainfall and runoff volumes being included in withdrawal volumes in FY2022 regardless of whether the volumes had been used during the reporting period.
2 Volumes of withdrawal by source were updated for FY2019, FY2018 and FY2017 for the Nickel West operated asset at Kwinana. Previously, the total volumes of water suppled to the site by a third party, Water Corporation, was proportionately to source in alignment with the public information (48 per cent from seawater, 42 per cent from groundwater and 10 per cent from surface water). In FY2020, Water Corporation supplied BHP site-specific proportions of water sources for our Kwinana operations for the FY2017 to FY2020 period and will continue to do so.
3 Small quantities of groundwater are extracted for pit dewatering to allow safe mining, and this water is used for operational consumption.
Water discharge includes water that has been removed from the operated asset and returned to the environment or distributed to a third party. This includes seepage from tailings storage facilities to groundwater, discharge from operations to surface waters (which are also affected by periods of higher rainfall) and discharge to seawater. Water we treat and then on-supply to third parties is captured as diverted water consistent with the ICMM guidance as it is not intended for operational purposes.
Total water discharges for FY2022 were 224,650 ML, an increase from 203,450 ML in FY2021 due to the increased throughput of the desalination facility at our Escondida asset. Total water discharge in high or very high water-stressed areas was 127,930 ML, 100 per cent of which was Type 3/low-quality water. Fifty-seven per cent of our total discharges were from Escondida, which is the bi-product of desalination via reverse osmosis of seawater, and 38 per cent of our total discharges were from our Petroleum operated assets, which is Type 3 water that was withdrawn as a by-product during the recovery of hydrocarbons from below the seabed (and therefore classed as groundwater in the ICMM guidance, GRI and WAF) and returned by re-injection to below the seabed or to the ocean. Therefore, almost all the water we discharged in FY2022 was drawn from and returned to the ocean. Together, these comprised 95 per cent of the total discharge and 100 per cent of the discharge in water-stressed areas for FY2022. Due to the demerger of our Petroleum business in FY2022, we expect our discharge volumes to reduce in FY2023.
Discharge to surface water (usually riverine systems) is influenced by climatic conditions such as rainfall and occurrence of extreme weather events, and therefore is subject to higher variability and is less predictable. Our water management practices at the operated assets where this may occur are designed to accommodate this variability and therefore the occurrence of such events is not anticipated to affect our current management activities and strategy or result in elevated exposure to risk.
In FY2022, approximately 45 per cent of our operated assets did not discharge water as their water was either consumed in operational activities or reused/recycled. This is similar to previous years, but note that prior to FY2019, the definition of water discharge included water that was evaporated or entrained. This is now reported as consumption, in line with the ICMM guidance. The extent of this change is shown in the data tables in our ESG Standards and Databook.
The ICMM guidance defines reused water as water that has previously been used at the operated asset that is used again without further treatment, and recycled water is water that is reused but is treated before it is used again.During FY2022, the total volume of water recycled/reused was 261,410 ML. The amount of recycled and reuse to total withdrawals is 53 per cent.
The ability of our operated assets to reuse and recycle water varies depending on the recovery processes used and the water quality requirements. The accuracy of the recycled/reused metric currently varies depending on the complexity of the process and how closely water movements are measured and understood. As our data collection and analysis improves, we expect to be able to more robustly assess opportunities to recycle or reuse water.
Other managed waterOther managed water (previously called diverted water) is water that is actively managed by an operated asset but not used for any operational purposes. For example, we withdraw water and treat it for use as drinking water by local communities, such as in the town of Roxby Downs in South Australia. In FY2022, 115,870 ML of water was withdrawn without any intention to be used at BHP operated assets, and 1180ML of this was in water-stressed areas. The majority of the other managed water is Type 1 and, in water stressed areas, all of the other managed water was Type 3.Most of our other managed water comes from treatment processes in our legacy assets in North America, and from dewatering in WAIO (which is described further in the WAIO water case study).As the withdrawal of Other Managed Water may occur in a different reporting period to its discharge, in any given annual period there may be a differential between withdrawal and discharge volumes for Other Managed Water. In FY2022, we discharged 81, 340 ML of Other Managed Water, the majority of which was Type 1 water.Water consumption
In FY2022, evaporation and entrainment remained the most significant contributors to consumption. Evaporation occurs during a number of operational activities including dust suppression, storage of tailings and storage of water.Evaporation consumption is inherently linked with climatic conditions. Evaporation data is estimated or simulated using average climatic conditions and therefore consumption due to evaporation should remain relatively stable. Due to the link with climatic conditions, the volumes consumed via evaporation are mostly outside of BHP’s direct control.Entrained water includes water incorporated into product and/or waste streams, such as tailings, that cannot be easily recovered. Entrainment may show variability due to the type and location of ore during any given reporting period. The use of water in our processing facilities, or for reducing dust release during storage of product, can result in entrainment of water.The category of ‘other’ for consumption includes several uses, the most significant being water used by people for drinking or ablutions at operated assets.The collation and disclosure of consumption will assist in identifying areas for improvements in data accuracy for entrainment and evaporation, and assist with identifying opportunities to reduce, where possible, loss of water. For example, in FY2022 we commenced further analysis of our Nickel West consumption data. Once completed, we believe that we will be able to more accurately reflect of the type of consumption (e.g., volumes consumed via evaporation and entrainment) of water within this operation.Total water consumption in FY2022 was 274,100 ML. Consumption in high or very high water-stressed locations was 115,400 ML (42 per cent of overall water consumption for BHP operated assets). The operated assets in FY2022 that consumed the most water were Escondida, WAIO and BMA.
Entrainment of water in tailings is the largest contributor to consumption at Escondida, whereas evaporation is the key driver of consumption at WAIO.
Entrainment in ore during processing, as well as evaporation from dust suppression and tailings and water storage all contribute to consumption at BMA. It should be noted that in any given reporting period, consumption and discharge volumes might be higher than withdrawals as evaporation can occur from water that has been captured and stored during previous periods.Changes in water storageBHP has a commitment to contribute to improved mining sector water reporting through strengthened ICMM guidance, aligned with GRI requirements. The updated ICMM guidance (2nd Edition) recommends reporting of changes in water storage for clarity, as an indicator of internal water dynamics, and to provide increased transparency of all elements of a water balance. The ICMM recommends reporting of aggregate volumes for all sites within the company and for all sites within water stress areas. The ICMM, WAF and GRI recommend disclosure of changes in water storage when the volumes influence water-related decisions, have a significant water-related impact on the site, environment, communities or stakeholders, represent a material component of the site’s water balance or trigger significant changes in flows volumes or quality.The ICMM guidance requires that, at a site level, the delta storage derived by mathematical balance broadly reconciles with the actual change in volume of water in storage over the same period. This infers that there is some allowance for uncertainty in the balance if actual changes are measured while other components of the balance are estimated, and comparison is considered a useful check for validating site data. Therefore, the balance should be reviewed and potential lags or uncertainties in the water system should be considered when assessing validity.In FY2022, we analysed our collated information on change in water storage to identify specific areas on which to focus our efforts to reduce uncertainty within our models relating to water storage and associated metrics at our BMA and NSWEC assets. While some areas for improvement were resolved during FY2022, other areas will take some time to fully implement. Therefore, we have not yet seen a reduction in uncertainty but expect that our improvement activities in FY2023 will result in a reduction of uncertainty within our BMA and NSWEC water balances. As discussed above, we have elected not to force a water balance at BMA and NSWEC to assist us in identifying where the opportunities are for improvements in the accuracy of our water balances at these operated assets.We have proactively elected to report changes in water storage from FY2022 as a recognition that for some of our operated assets, changes in storage can influence management decisions or are material to the overall water balance at that asset. However, we acknowledge that this data still contains uncertainty and, as a result, changes in data (including retrospective changes) may occur as we focus our efforts on the water balances at our BMA and NSWEC operated assets.As expected, the largest changes in water storage during FY2022 occurred at our coal operated assets. This is where the majority of our water source is from rainfall and as discussed in the ‘Water and Risk at BHP’ section of this webpage is highly variable year to year.Public sustainability target for waterWe are proud to report that we have exceeded our public sustainability target for freshwater withdrawal,1 which was to reduce these withdrawals by 15 per cent by FY2022 from an adjusted FY2017 baseline.2 Between FY20218 and FY2022, we have had a 29 per cent reduction in freshwater withdrawal, predominately due to the replacement of water sourced from groundwater at our Escondida operation being replaced by desalinated water (seawater). The performance is shown in the figure below. Freshwater withdrawal decreased 1 per cent in FY2022 compared to FY2021.
Please see the BHP Operating and Financial Review 7.16 - Water, for further information related to this target and performance.
1‘Fresh water’ is defined as waters other than seawater, wastewater from third parties and hypersaline groundwater. Freshwater withdrawal also excludes entrained water that would not be available for other uses. These exclusions have been made to align with the target’s intent to reduce the use of freshwater sources of potential value to other users or the environment.
2 The FY2017 baseline data has been adjusted to account for: the materiality of the strike affecting water withdrawals at Escondida in FY2017 and improvements to water balance methodologies at WAIO and BMA, exclusion of hypersaline, wastewater, entrainment, supplies from desalination and removal of data for Discontinued operations (Onshore US assets and Petroleum) and BMC.
Water-related legal performance
During FY2022, we had two incidents of water-related non-compliance that resulted in a formal enforcement action. These occurred at BMA, with one of the enforcement actions received in FY2023 in respect to an incident that occurred in FY2022. The two incidents related to releasing mine affected water from a location not authorised by the environmental authority (under permit).
Three water-related legal issues are currently pending at our Minerals America operated assets. These relate to:
- an environmental damage action related to the alleged impact to the Lagunillas aquifer at Cerro Colorado
- two environmental damage claims (with two separate government agencies) relating to extraction of water from the Monturaqui aquifer near Escondida
In FY2023, we intend to release our context-based, asset-level water targets (CBWTs) for our operated assets and the remainder of our WRSAs.
The nature of CBWTs will vary across our operated assets, as we consider both the nature of our interactions with water and the shared water challenges within each region. We plan to further enhance our water accounting during FY2023 and continue our collaboration on water governance and management with external parties.
- United Nations Global Compact’s CEO Water Mandate Initiative
- America’s WETLAND Foundation: Bayou Terrebonne Biodiversity and Resiliency Project
- Groundwater Modelling Decision Support Initiative
- Escondida: Breaking the water-energy nexus