Press Release

DBRS Morningstar Confirms BHP Group Limited & BHP Group plc at “A” with a Stable Trend

Natural Resources
October 26, 2022

DBRS Limited (DBRS Morningstar) confirmed the Issuer Rating of BHP Group Limited & BHP Group plc (BHP or the Company) at “A” with a Stable trend. The rating confirmation is a result of (1) the Company’s strong key credit metrics that improved further in F2022 compared with F2021 because of the 13% and 16% increases in adjusted cash flow and EBITDA, respectively, and (2) the Company’s stable business risk profile following the spin-out of its remaining petroleum assets to Woodside Petroleum Ltd. The Stable trend reflects BHP’s ongoing reduction of adjusted debt, which declined $4.6 billion or 22% in F2022. DBRS Morningstar notes that last week BHP redeemed its GBP 600 million of Subordinated Non-Call Fixed-Rate Reset Notes, providing more support to the Company’s financial risk profile.

BHP continued to face operating headwinds from the Coronavirus Disease (COVID-19) pandemic; in F2022, the pandemic-related costs were an estimated $1.2 billion attributable to lost production volumes along with direct costs of $277 million. As well, BHP’s total F2022 Group expenses were $32.8 billion or about 5% higher than in F2021. DBRS Morningstar notes that operating margins are expected to remain resilient based on Bloomberg consensus mined commodity price forecasts (as of September 28, 2022), albeit with risks to the downside because of the current global economic uncertainty. The Company reported that the most recent wave of the pandemic has peaked in Australia but has yet to peak in Chile, where it isn’t expected to be as disruptive as previous waves.

The Company continues to make progress on major projects, including (1) the Jansen Stage 1 project tracking on plan for initial production in 2026, (2) the receipt of regulatory approval to expand its Port Hedland operations to 330 million tonnes per year (mtpa) (100% basis) with a near-term focus on achieving a sustainable run rate of 290 mtpa and then gradually increasing, and (3) the implementation of autonomous trucks across its Australia iron ore and coal mine sites, which include the Autonomous Haulage Project at the South Flank iron ore mine, and completion of the automation of the truck fleet at the Goonyella-Riverside metallurgical coal mine. In November 2021, BHP completed full automation of the truck haul fleet at the Daunia metallurgical coal mine.

DBRS Morningstar views BHP’s liquidity profile as positive, with $17.2 billion of cash and $5.5 billion available on the Company’s credit facility at June 30, 2022. Nevertheless, a positive rating action in the near term is unlikely in the absence of a significantly accretive acquisition that materially improves BHP’s business risk profile. DBRS Morningstar estimates that prices for BHP’s mix of mined commodities would have to decline by approximately 50% below the Bloomberg consensus commodity price forecasts on a sustained basis before a negative rating action could be warranted.

Social Factors
DBRS Morningstar considered community relations as a relevant social factor for BHP. BHP and partner Vale S.A. (Vale; rated BBB (low) with a Stable trend by DBRS Morningstar) have yet to reach a final settlement with the local communities affected by the Samarco Dam failure in Brazil in 2015. From a reputational risk perspective, BHP has more downside than Vale in that Vale has already agreed to a settlement for the 2019 Brumadinho disaster.

There were no Environmental or Governance factors that had a significant or relevant effect on the credit analysis.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at (May 17, 2022).

The principal methodologies are the Global Methodology for Rating Companies in the Mining Industry (August 30, 2022; and DBRS Morningstar Global Criteria: Preferred Share and Hybrid Security Criteria for Corporate Issuers (October 20, 2022;, which can be found on under Methodologies & Criteria.

A description of how DBRS Morningstar analyzes corporate finance transactions and how the methodologies are collectively applied can be found at:

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at

This rating was not initiated at the request of the rated entity.

The rated entity or its related entities did not participate in the rating process for this rating action. DBRS Morningstar did not have access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

This is an unsolicited credit rating.

The conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. DBRS Morningstar trends and ratings are under regular surveillance.

For more information on this credit or on this industry, visit or contact us at

DBRS Limited
DBRS Tower, 181 University Avenue, Suite 700
Toronto, ON M5H 3M7 Canada
Tel. +1 416 593-5577