Investments accounted for using the equity method (Tables)

12 Months Ended

Jun. 30, 2019

Summary of Ownership Interest in Equity Accounted Investments

Significant interests in equity accounted investments of the Group are those with the most significant contribution to the Group’s net profit or net assets. The Group’s ownership interest in equity accounted investments results are listed in the table below. For a complete list of the Group’s associates and joint ventures, refer to Exhibit 8.1 – List of Subsidiaries.

Significant associates

and joint ventures

Country of
incorporation/
principal place of
business

Associate or
joint
venture

Principal
activity

Reporting
date

Ownership interest

2019
%

2018
%

Cerrejón

Anguilla/
Colombia/
Ireland

Associate

Coal mining in Colombia

31 December

33.33

33.33

Compañía Minera Antamina S.A. (Antamina)

Peru

Associate

Copper and zinc mining

31 December

33.75

33.75

Samarco Mineração S.A. (Samarco)

Brazil

Joint
venture

Iron ore mining

31 December

50.00

50.00

Summary of Movements of Investments Accounted for using the Equity Method

The movement for the year in the Group’s investments accounted for using the equity method is as follows:

Year ended 30 June 2019

US$M

Investment in
associates

Investment in
joint ventures

Total equity
accounted
investments

At the beginning of the financial year

2,473

–

2,473

(Loss)/profit from equity accounted investments, related impairments and expenses ⁽¹⁾

399

(945

)

(546

)

Investment in equity accounted investments

207

303

Dividends received from equity accounted investments

(510

)

–

(510

)

Other

–

849

At the end of the financial year

2,569

–

2,569

⁽¹⁾

US$(945) million represents US$(96) million share of loss from US$(96) million funding provided during the period and US$(849) million movement in provisions related to the Samarco dam failure including US$(579) million change in estimate, US$(7) million exchange translation and US$(263) million Samarco Germano dam decommissioning provision. Refer to note 4 ‘Significant events – Samarco dam failure’ for further information.

Summary of Financial Information of Significant Equity Accounted Investments

The following table summarises the financial information relating to each of the Group’s significant equity accounted investments. BHP Billiton Brasil’s 50 per cent portion of Samarco’s commitments, for which BHP Billiton Brasil has no funding obligation, is US$250 million (2018: US$550 million).

Associates

Joint ventures

2019

US$M

Antamina

Cerrejón

Individually
immaterial⁽¹⁾

Samarco⁽²⁾

Individually
immaterial

Total

Current assets

1,065

845

290

⁽³⁾

Non-current assets

4,495

2,664

6,103

Current liabilities

(498

)

(344

)

(6,704

) ⁽⁴⁾

Non-current liabilities

(1,076

)

(801

)

(5,830

)

Net assets/(liabilities) – 100%

3,986

2,364

(6,141

)

Net assets/(liabilities) – Group share

1,345

788

(3,071

)

Adjustments to net assets related to accounting policy adjustments

–

366

⁽⁵⁾

Impairment of the carrying value of the investment in Samarco

–

(525

) ⁽⁶⁾

Additional share of Samarco losses

–

3,145

⁽⁷⁾

Unrecognised losses

–

⁽⁸⁾

Carrying amount of investments accounted for using the equity method

1,345

853

371

–

2,569

Revenue – 100%

3,203

2,094

Profit/(loss) from Continuing operations – 100%

1,168

309

(2,166

) ⁽⁹⁾

Share of operating profit/(loss) of equity accounted investments

394

103

(1,075

)

Additional share of Samarco losses

–

108

Unrecognised losses

–

⁽⁸⁾

(Loss)/profit from equity accounted investments, related impairments and expenses

394

103

(98

)

(945

)

–

(546

)

Comprehensive income/(loss) – 100%

1,168

309

(2,166

)

Share of comprehensive income/(loss) – Group share in equity accounted investments

394

103

(98

)

(945

)

–

(546

)

Dividends received from equity accounted investments

361

134

–

510


	Associates									Joint ventures
2018 US$M	Antamina			Cerrejón			Individually immaterial⁽¹⁾			Samarco⁽²⁾			Individually immaterial		Total
Current assets		1,099			1,187						79	⁽³⁾
Non-current assets		4,385			2,485						6,023
Current liabilities		(532	)		(585	)					(5,811	)⁽⁴⁾
Non-current liabilities		(1,064	)		(663	)					(4,265	)

Net assets/(liabilities) – 100%		3,888			2,424						(3,974	)

Net assets/(liabilities) – Group share		1,312			808						(1,987	)
Adjustments to net assets related to accounting policy adjustments		1			75						357	⁽⁵⁾
Impairment of the carrying value of the investment in Samarco		–			–						(525	)⁽⁶⁾
Additional share of Samarco losses		–			–						2,092	⁽⁷⁾
Unrecognised losses		–			–						63	⁽⁸⁾

Carrying amount of investments accounted for using the equity method		1,313			883			277			–			–		2,473

Revenue – 100%		3,866			2,453						30
Profit/(loss) from Continuing operations – 100%		1,613			576						(1,558	)⁽⁹⁾

Share of operating profit/(loss) of equity accounted investments		544			192						(823	)
Additional share of Samarco losses		–			–						251
Unrecognised losses		–			–						63	⁽⁸⁾

Profit/(loss) from equity accounted investments, related impairments and expenses		544			192			(80	)		(509	)		–		147

Comprehensive income/(loss) – 100%		1,613			576						(1,558	)

Share of comprehensive income/(loss) – Group share in equity accounted investments		544			192			(80	)		(509	)		–		147

Dividends received from equity accounted investments		496			181			16			–			–		693


	Associates							Joint ventures
2017 US$M	Antamina		Cerrejón		Individually immaterial			Samarco⁽²⁾			Individually immaterial		Total
Revenue – 100%		2,905		2,247					28
Profit/(loss) from Continuing operations – 100%		1,010		388					(1,520	)⁽⁹⁾

Share of operating profit/(loss) of equity accounted investments		341		129					(760	)
Additional share of Samarco losses		–		–					588

Profit/(loss) from equity accounted investments, related impairments and expenses		341		129		(26	)		(172	)		–		272

Comprehensive income/(loss) – 100%		1,010		388					(1,520	)

Share of comprehensive income/(loss) – Group share in equity accounted investments		341		129		(26	)		(172	)		–		272

Dividends received from equity accounted investments		425		163		32			–			–		620

⁽¹⁾	The unrecognised share of profit for the period was US$15 million (2018: unrecognised share of loss for the period was US$56 million), which decreased the cumulative losses to US$181 million (2018: increase to US$196 million).

⁽²⁾	Refer to note 4 ‘Significant events – Samarco dam failure’ for further information regarding the financial impact of the Samarco dam failure in November 2015 on BHP Billiton Brasil’s share of Samarco’s losses.

⁽³⁾	Includes cash and cash equivalents of US$246 million (2018: US$23 million).

⁽⁴⁾	Includes current financial liabilities (excluding trade and other payables and provisions) of US$5,510 million (2018: US$5,066 million).

⁽⁵⁾	Relates mainly to dividends declared by Samarco that remain unpaid at balance date and which, in accordance with the Group’s accounting policy, are recognised when received not receivable.

⁽⁶⁾	In the year ended 30 June 2016 BHP Billiton Brasil adjusted its investment in Samarco to US$ nil (resulting from US$(655) million share of loss from Samarco and US$(525) million impairment).

⁽⁷⁾

BHP Billiton Brasil has recognised accumulated additional share of Samarco losses of US$(3,145) million resulting from US$(310) million share of loss from funding provided to Samarco and US$(2,835) million from provisions relating to the Samarco dam failure, including US$(319) million recognised as net finance costs.

⁽⁸⁾	Share of Samarco’s losses for which BHP Billiton Brasil does not have an obligation to fund.

⁽⁹⁾

Includes depreciation and amortisation of US$85 million (2018: US$73 million; 2017: US$88 million), interest income of US$22 million (2018: US$31 million; 2017: US$57 million), interest expense of US$342 million (2018: US$385 million; 2017: US$473 million) and income tax benefit/(expense) of US$52 million (2018: US$(154) million; 2017: US$(851) million).