Operational Review for the Year Ended 30 June 2014

BHP BILLITON OPERATIONAL REVIEW FOR THE YEAR ENDED 30 JUNE 2014

· Strong operating performance delivered a 9% increase in Group production with annual records achieved across 12 operations and four commodities.

· Western Australia Iron Ore achieved a fourteenth consecutive annual production record as volumes increased to 225 Mt (100% basis), significantly exceeding initial full-year guidance. We now expect production of 245 Mt (100% basis) from the Pilbara in the 2015 financial year.

· Metallurgical coal production of 45 Mt exceeded full-year guidance as Queensland Coal achieved record production and sales volumes.

· Copper production increased to 1.7 Mt as an improvement in mill throughput and concentrator utilisation offset grade decline at a number of operations.

· Petroleum production increased by 4% to a record 246 MMboe with an 18% increase in liquids volumes underpinned by significant growth at Onshore US and Atlantis.

· Six major projects were completed and another two projects achieved first production, including the Caval Ridge coal mine which was completed ahead of schedule and under budget in the June 2014 quarter.

BHP Billiton Chief Executive Officer, Andrew Mackenzie, said: "Our focus on productivity has resulted in a significant improvement in operating performance at each of our major businesses this year, with a nine per cent(1) increase in Group production and record output at 12 operations. Western Australia Iron Ore and Queensland Coal annual production exceeded guidance, with both rising by more than 20 per cent as we delivered more tonnes from existing infrastructure and growth projects ahead of schedule. At Escondida, an increase in mill throughput and concentrator utilisation offset copper grade decline, while our Onshore US business delivered a 73 per cent increase in petroleum liquids production.

"We expect to maintain strong momentum and remain on track to generate Group production growth of 16 per cent(1) over the two years to the end of the 2015 financial year. In Petroleum, we are investing in our highest-return acreage while a broader improvement in productivity is expected to underpin stronger iron ore, copper and metallurgical coal volumes. We will remain focused on value over volume as we prioritise our brownfield development options and consider the next phase of portfolio simplification."

Note: Unless specified otherwise: variance analysis relates to the relative performance of BHP Billiton and/or its operations during the 2014 financial year compared with the 2013 financial year or the June 2014 quarter compared with the March 2014 quarter; production volumes, sales volumes and capital and exploration expenditure from subsidiaries (which include Escondida, Jimblebar, BHP Billiton Mitsui Coal and our manganese operations) are reported on a 100 per cent basis; production volumes, sales volumes and capital and exploration expenditure from equity accounted investments (which include Antamina, Samarco and Cerrejón) and other operations are reported on a proportionate consolidation basis. Abbreviations referenced in this report are explained on page 14.

Summary

Strong operating performance in the 2014 financial year delivered a nine per cent(1) increase in Group production as records were achieved across 12 operations and four commodities. Group production growth of 16 per cent(1) is expected over the two years to the end of the 2015 financial year.

Western Australia Iron Ore (WAIO) significantly exceeded initial full-year production guidance as the early commissioning of Jimblebar and our productivity agenda raised the capacity of our integrated supply chain. The ramp-up of Jimblebar to 35 Mtpa (100 per cent basis) is now expected before the end of the 2014 calendar year and will support a further 20 Mt increase in WAIO production to approximately 245 Mt (100 per cent basis) in the 2015 financial year. A low-cost option to expand Jimblebar to 55 Mtpa (100 per cent basis) and broader debottlenecking of the supply chain are expected to underpin further growth in capacity towards 270 Mtpa (100 per cent basis).

Metallurgical coal production exceeded full-year guidance as Queensland Coal achieved record production and sales volumes. This included first production from Caval Ridge, the successful ramp-up of Daunia and record production at Peak Downs, Saraji, South Walker Creek and Poitrel. Metallurgical coal production is forecast to increase by four per cent in the 2015 financial year to 47 Mt as the ramp-up of Caval Ridge is completed.

Escondida copper production increased by two per cent as an improvement in mill throughput and concentrator utilisation offset declining ore grades. With further improvements in productivity anticipated, Escondida is on track to produce approximately 1.27 Mt of copper in the 2015 financial year, while Group copper production is forecast to increase by five per cent(2) to 1.8 Mt.

Energy coal volumes were broadly unchanged in the 2014 financial year as a fifth consecutive production record at New South Wales Energy Coal and record volumes at Cerrejón were offset by lower production at South Africa Energy Coal and Navajo Coal. Energy coal production for the 2015 financial year is expected to remain broadly unchanged at 73 Mt.

Petroleum production of 246 MMboe marginally exceeded revised full-year guidance as liquids volumes in our Onshore US business increased by 23 per cent in the June 2014 quarter. Petroleum production is forecast to increase by five per cent(2) in the 2015 financial year to 255 MMboe with high-margin liquids volumes expected to increase by 16 MMboe. We remain confident that Onshore US will be strongly EBIT positive in the 2015 financial year as the liquids contribution is forecast to rise to approximately 40 per cent of total shale production.

Production guidance for the 2015 financial year is summarised in the table below.

Major development projects

At the end of the 2014 financial year, BHP Billiton had eight low-risk, largely brownfield major projects under development with a combined budget of US$14.1 billion.

During the 2014 financial year we successfully completed six projects, namely: Macedon; North West Shelf North Rankin B Gas Compression; WAIO Jimblebar Mine Expansion; WAIO Port Blending and Rail Yard Facilities; Samarco Fourth Pellet Plant; and Caval Ridge. Caval Ridge was completed in the June 2014 quarter, ahead of schedule and under budget, and will not be reported in future Operational Reviews. Another two projects, Newcastle Third Port Stage 3 and Cerrejón P40, delivered first coal during the year.

A US$212 million increase in the budget of the Escondida Oxide Leach Area project to US$933 million has been approved. The project is now expected to be completed in the second half of the 2014 calendar year with no associated impact to production.

Corporate update

BHP Billiton expects Underlying EBIT in the June 2014 half year to include additional charges in a range of approximately US$0.9 billion to US$1.3 billion related to: (1) impairments and mine site rehabilitation; and (2) redundancies and the closure of operations associated with our productivity agenda. Items include impairments (related to the Port of Vancouver and small Gulf of Mexico petroleum assets) and mine site rehabilitation costs in Petroleum and Potash, and the impairment of assets at South Africa Energy Coal. Redundancy costs will be recognised in our Coal, Iron Ore and Aluminium, Manganese and Nickel Businesses, while additional costs will be recognised following the closure of aluminium smelting activities at Bayside. This guidance will be updated should material information or events arise as the Company finalises its financial statements.

We continued to simplify our portfolio during the 2014 financial year with the successful completion of numerous transactions, including Jimblebar and Pinto Valley. In the last two years alone, the Group has completed transactions exceeding US$6.7 billion in Australia, the United States, Canada, South Africa and the United Kingdom, including petroleum, copper, iron ore, coal, mineral sands, uranium and diamonds assets. We continue to actively study the next phase of simplification, including structural options, but we will only pursue options that maximise value for BHP Billiton shareholders.

Marketing update

The average realised prices achieved for our major commodities are summarised in the table below. Iron ore shipments, on average, were linked to the index price for the month of shipment, with price differentials reflecting product quality. The majority of metallurgical coal and energy coal exports were linked to the index price for the month of shipment or sold on the spot market, with price differentials reflecting product quality.

At 30 June 2014, the Group had 350 kt of outstanding copper sales that were revalued at a weighted average price of US$3.19 per pound. The final price of these sales will be determined in the 2015 financial year. In addition, 386 kt of copper sales from the 2013 financial year were subject to a finalisation adjustment in 2014. The provisional pricing and finalisation adjustments will increase earnings before interest and tax by US$73 million in the 2014 financial year (2013 financial year: US$303 million decrease; December 2013 half year: US$196 million increase).

Petroleum and Potash

Production

Total petroleum production - Petroleum production increased by four per cent in the 2014 financial year to 246 MMboe and included strong performance from Onshore US which delivered a 73 per cent increase in liquids volumes. Petroleum production is forecast to increase by five per cent(2) in the 2015 financial year to 255 MMboe as continued growth at Onshore US contributes to a 16 MMboe increase in total liquids production. Conventional volumes for the 2015 financial year are forecast to remain broadly unchanged, consistent with prior guidance.

Crude oil, condensate and natural gas liquids - Crude oil, condensate and natural gas liquids production increased by 18 per cent in the 2014 financial year to 106 MMboe. Onshore US, liquids production increased by 23 per cent in the June 2014 quarter and we expect to carry strong momentum into the 2015 financial year as shale liquids volumes are forecast to increase by over 17 MMboe in the period. We remain confident that Onshore US will be strongly EBIT positive in the 2015 financial year as the liquids contribution is forecast to rise to approximately 40 per cent of total shale production.

In our conventional business, a near doubling of production at Atlantis was achieved ahead of prior guidance as the early completion of two production wells brought forward volumes into the 2014 financial year. While production at Pyrenees declined by 12 per cent as a result of major maintenance, volumes recovered strongly in the second half of the financial year following the completion of five new production wells.

Natural gas - Natural gas production declined by four per cent in the 2014 financial year to 839 bcf. The delivery of first gas from Macedon partially offset lower demand at Bass Strait and natural field decline at Haynesville.

Projects and Onshore US capital expenditure

In the 2014 financial year, approximately 75 per cent of Onshore US drilling and development expenditure of US$4.2 billion was invested in the Eagle Ford, with the majority focused on our Black Hawk acreage.

Petroleum exploration

There were no exploration or appraisal wells drilled during the June 2014 quarter. Petroleum exploration expenditure for the 2014 financial year was US$600 million, of which US$369 million was expensed. Activity for the period was largely focused on the Gulf of Mexico and Western Australia.

Potash

During the June 2014 quarter, BHP Billiton allowed the exclusivity agreement for Terminal 5 at the Port of Vancouver (US) to lapse. Our development schedule at Jansen provides us with the flexibility to consider a broad range of port and rail options.

Copper

Production

Copper - Total copper production increased by two per cent in the 2014 financial year to 1.7 Mt as planned. Total copper production is forecast to increase by five per cent(2) in the 2015 financial year to 1.8 Mt.

Escondida copper production increased by two per cent in the 2014 financial year to 1.2 Mt as an improvement in mill throughput and concentrator utilisation offset declining ore grades. With further improvements in productivity anticipated, Escondida is on track to produce approximately 1.27 Mt of copper in the 2015 financial year. A power outage throughout Northern Chile in July 2014 and a six-day maintenance shutdown at the Laguna Seca concentrator will impact production in the September 2014 quarter. Commissioning of Organic Growth Project 1 is scheduled for the June 2015 quarter.

Pampa Norte copper production of 233 kt for the 2014 financial year was unchanged from the prior period. Production is forecast to remain at a similar level in the 2015 financial year as higher grades and recoveries at Spence offset declining grades and recoveries at Cerro Colorado. A 12-day maintenance shutdown at Cerro Colorado and tertiary crusher maintenance at Spence is expected to impact production in the September 2014 quarter.

Record mining rates at Olympic Dam underpinned an 11 per cent increase in copper production in the 2014 financial year to 184 kt. While an annualised production rate of 219 kt in the June 2014 quarter indicates the degree of improvement achieved in the existing underground operation, volumes in the 2015 financial year are expected to remain broadly unchanged as a result of the current smelter maintenance program which is expected to be completed early in the September 2014 quarter. A major smelter maintenance campaign is scheduled to commence in the June 2015 quarter.

Antamina achieved records for mill throughput and copper production in the 2014 financial year. Average copper grades at Antamina in the 2015 financial year are expected to remain at a similar level to the June 2014 quarter, leading to lower copper production, consistent with the mine plan.

Lead/silver - Lead and silver production decreased by 12 per cent and 11 per cent, respectively, in the 2014 financial year as lower average ore grades at Cannington were partially offset by a record mining rate.

Zinc - Total zinc production decreased by 14 per cent in the 2014 financial year and reflected lower grades at Antamina, consistent with the mine plan.

Uranium - The production of uranium oxide concentrate was broadly unchanged in the 2014 financial year.

Projects

Iron Ore

Production

Iron ore - Iron ore production increased by 20 per cent in the 2014 financial year to a record 204 Mt, exceeding initial full-year guidance by more than eight per cent. Total iron ore production is forecast to increase by 11 per cent in the 2015 financial year to 225 Mt.

Western Australia Iron Ore production of 225 Mt (100 per cent basis) represents a fourteenth consecutive annual record and was underpinned by the early commissioning of Jimblebar and our productivity agenda, which raised the capacity of our integrated supply chain. Production from the Wheelarra Joint Venture, which was previously processed through Newman, was permanently connected to the Jimblebar processing hub during the period. The spare capacity created at Newman is now being utilised by existing operations. The ramp-up of Jimblebar to 35 Mtpa (100 per cent basis) is now expected before the end of the 2014 calendar year.

In the 2015 financial year WAIO production is expected to increase by a further 20 Mt to approximately 245 Mt (100 per cent basis). Yet another year of record performance will be supported by additional productivity gains despite the tie-in of shiploaders 1 and 2 during the period. A low-cost option to expand Jimblebar to 55 Mtpa (100 per cent basis) and broader debottlenecking of the supply chain are expected to underpin further growth in capacity towards 270 Mtpa (100 per cent basis).

Samarco production of 22 Mt (100 per cent basis) was broadly unchanged in the 2014 financial year. The fourth pellet plant was commissioned in the March 2014 quarter and the ramp-up to 30.5 Mtpa (100 per cent basis) is expected before the end of the 2015 financial year.

Major increase in Mineral Resource at Western Australia Iron Ore

BHP Billiton also confirms a 13 per cent increase in the Mineral Resource at WAIO compared to the previous 30 June 2013 estimate (Table 2). The increase reflects the inclusion of 500 km of infill drilling and revised resource estimates that have continued to delineate orebodies primarily with Brockman (67 per cent of the increase) and Marra Mamba (33 per cent of the increase) ore types, with changes after consideration of mining depletion in the 2014 financial year. BHP Billiton ownership averages 88 per cent but varies between 85 per cent and 100 per cent. Information pertaining to the orebodies that contribute to the increase in Mineral Resource is contained in Appendix 1.

WAIO is located within the Pilbara region of Western Australia. The geology of the region, comprising the Hamersley and North East Pilbara Provinces, has been extensively studied and is well documented based on extensive mapping, exploratory drilling and mining. The Hamersley Group forms the central part of the Mt Bruce Supergroup and contains two iron bearing stratigraphic sequences, with major bedded ores hosted by the Brockman Iron Formation and Marra Mamba Iron Formation. The Nimingarra Iron Formation in the North East Pilbara, hosts the Yarrie-Nimingarra iron ore deposits. Another important iron bearing sequence is the Marillana Formation which is a detrital derived Channel Iron Deposit currently mined at Yandi.

WAIO Mineral Resources contain the ore types: BKM - Brockman, CID - Channel Iron Deposits, MM - Marra Mamba and NIM - Nimingarra.

Mineral Resource estimates are largely based upon three metre samples obtained from 140 millimetre Reverse Circulation (RC) drill holes and to a lesser extent 0.3 metre to three metre samples obtained from HQ3 and PQ3 type Diamond Drill holes and three metre samples obtained from 140 millimetre open Percussion holes.

RC and Percussion samples are either riffle or static cone split whereas diamond core is typically sampled as a whole. Samples are crushed to 90 per cent minus 2.8 millimetres and then pulverised to 95 per cent minus 0.16 millimetres. Pulp (200 grams) is then used for chemical analysis by X-Ray Fluorescence (XRF) for Fe, SiO2, Al2O3, P, MnO, CaO, K2O, MgO, S and TiO2 and Robotic Thermo-Gravimetric Analysis (ROBTGA) for Loss on Ignition (LOI).

Resource estimation is typically performed by Ordinary Kriging (OK) interpolation which uses search criteria consistent with geostatistical models separately developed for both Fe and associated deleterious elements such as SiO2, Al2O3 and P according to the appropriate geological controls. To a lesser extent some deposits contributing Inferred Resources have been estimated using Inverse Distance Weighted (IDW) interpolation or Cross Sectional Area of Influence techniques reflecting data density.

Mineral resources have been classified considering data density, data quality, geological continuity and/or complexity, estimation quality, weathering zones and proximity to the water table (Table 1).

Typically a 54 per cent Fe cut-off is used for resource reporting of Marra Mamba and Brockman Iron Formations, a 52 per cent Fe cut-off is used for Channel Iron Deposits and a 50 per cent Fe cut-off for operational areas within the Nimingarra Formation. These cut-offs employed for the Pilbara Mineral Resources estimates are based on break-even economic analysis and assumed open pit extraction and processing by crushing and screening. It is reasonable to consider that all material above the Mineral Resource cut-off grade would be eligible for sale, either now or in the future as indicated by WAIO strategic mine planning.

As at 30 June 2014

As at 30 June 2014 (continued)

As at 30 June 2013

Additional information is contained in Appendix 1.

Coal

Production

Metallurgical coal - Metallurgical coal production increased by 20 per cent in the 2014 financial year to a record 45 Mt, exceeding full-year guidance. Metallurgical coal production is forecast to increase by four per cent in the 2015 financial year to 47 Mt as the ramp-up of Caval Ridge is completed.

Queensland Coal achieved record production and sales volumes in the 2014 financial year, supported by strong performance across all operations. This included first production from Caval Ridge, the successful ramp-up of Daunia and record production at Peak Downs, Saraji, South Walker Creek and Poitrel. A sustainable increase in truck and wash-plant utilisation rates underpinned a further improvement in productivity across the business.

Illawarra Coal production declined by five per cent in the 2014 financial year to 7.5 Mt. An extended outage at the Dendrobium mine impacted performance, primarily in the September 2013 quarter.

As a result of continued weakness in coal prices, persistent strength of the Australian dollar and the recognition of redundancy and restructuring charges, Queensland Coal was marginally EBIT positive during the second half of the 2014 financial year.

Energy coal - Energy coal production of 73 Mt in the 2014 financial year was broadly unchanged from the prior period as planned. Another year of robust performance was underpinned by a fifth consecutive annual production record at New South Wales Energy Coal and record volumes at Cerrejón. Extended outages at both a local utility and the Richards Bay Coal Terminal led to lower production at South Africa Energy Coal, while Navajo Coal production declined following the permanent closure of three of the five power units at the Four Corners Power Plant.

Energy coal production for the 2015 financial year is expected to remain broadly unchanged at 73 Mt. A drought in the La Guajira region of Colombia is expected to constrain Cerrejón production for the remainder of the 2014 calendar year, given the requirement to manage dust emissions. The port expansion associated with the Cerrejón P40 project is currently being commissioned, although operational issues are expected to constrain capacity at approximately 35 Mtpa (100 per cent basis) in the medium term.

Projects

Aluminium, Manganese and Nickel

Production

Alumina - Alumina production increased by six per cent in the 2014 financial year to a record 5.2 Mt. The Efficiency and Growth project at Worsley reached nameplate capacity during the year and annual production records were achieved at both the Worsley and Alumar refineries.

Aluminium - Aluminium production in the 2014 financial year was unchanged at 1.2Mt. Production records at both Hillside and Mozal were offset by lower volumes at Alumar following the phased suspension of 103 kt (BHP Billiton share) of annualised capacity during the 2014 financial year. The final potline at Bayside was closed in June 2014, although the cast house will be supplied by our Hillside smelter as we continue to assess its future.

Manganese ores - Despite achieving record production in the June 2014 quarter, manganese ore volumes declined by three per cent in the 2014 financial year as GEMCO was affected by higher than usual rainfall during the wet season.

Manganese alloys - Manganese alloy production increased by six per cent from the 2013 financial year which was affected by the temporary suspension of operations at TEMCO.

Nickel - Nickel production declined by seven per cent in the 2014 financial year to 143 kt as production at Cerro Matoso was affected by kiln and furnace outages, and lower nickel grades. Nickel West production declined by four per cent following the closure of the Perseverance underground mine in November 2013.

Saleable nickel production at Nickle West is expected to decline by four per cent in the 2015 financial year to 95 kt. Ferro-nickel production at Cerro Matoso is expected to decline by three per cent to 43 kt as a result of lower grades and recoveries.

On 14 May 2014, BHP Billiton announced a review of the Nickel West business, comprising the Mt Keith, Cliffs and Leinster mines, its concentrators, the Kalgoorlie smelter and the Kwinana refinery. The review is considering all options for the long-term future of Nickel West, including the potential sale of all or part of the business.

Minerals exploration

Minerals exploration expenditure in the 2014 financial year was US$410 million, of which US$347 million was expensed. Greenfield minerals exploration is predominantly focused on advancing copper targets within Chile and Peru.

1 Refers to copper equivalent production based on average realised prices for the 2013 financial year.

2 Excludes operations which were sold during the year (Liverpool Bay and Pinto Valley).

3 Based on provisional, unaudited estimates. Prices excludes third party product, and represent the weighted average of various sales terms (for example, FOB, CIF and CFR), unless otherwise noted.

4 Includes third party product.

5 Export sales only, excludes Cerrejón. Includes thermal coal sales from metallurgical coal mines.

6 Excludes internal sales.

7 Competent Persons - P. Whitehouse (MAusIMM), M. Lowry (MAusIMM), M. Smith (MAusIMM), D. Stephens (MAIG).

The statement of Mineral Resources is presented on a 100 per cent basis, represents an estimate as at 30 June 2014, and is based on information compiled by the above named Competent Persons. Mr. Whitehouse, Mr. Lowry, Mr. Smith and Mr. Stephens are full time employees of BHP Billiton Iron Ore Ltd, are members of either The Australasian Institute of Mining and Metallurgy or The Australian Institute of Geoscientists, and have sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity they are undertaking to qualify as Competent Persons as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr. Whitehouse, Mr. Lowry, Mr. Smith and Mr. Stephens consent to the inclusion in the report of the matters based on their information in the form and context in which it appears.

8 Excludes announced pre-commitment funding.

The following abbreviations have been used throughout this report: barrels (bbl) billion cubic feet (bcf); cost and freight (CFR); cost, insurance and freight (CIF), dry metric tonne unit (dmtu); free on board (FOB); grams per tonne (g/t); kilograms per tonne (kg/t); kilometre (km); metre (m); million barrels of oil equivalent (MMboe); million cubic feet per day (MMcf/d); million tonnes (Mt); million tonnes per annum (Mtpa); ounces (oz); pounds (lb) thousand barrels of oil equivalent (Mboe); thousand ounces (koz); thousand standard cubic feet (Mscf); thousand tonnes (kt); thousand tonnes per annum (ktpa); thousand tonnes per day (ktpd); tonnes (t); and wet metric tonnes (wmt).

Further information on BHP Billiton can be found at: www.bhpbilliton.com

Throughout this report figures in italics indicate that this figure has been adjusted since it was previously reported.

BHP BILLITON PRODUCTION

(1) LPG and ethane are reported as Natural Gas Liquid (NGL). Product-specific conversions are made and NGL is reported in barrels of oil equivalent (boe). Total boe conversions are based on 6,000 scf of natural gas equals 1 boe.

(2) Metal production is reported on the basis of payable metal.

(3) Shown on 100% basis following the application of the new IFRS 10 which came into effect from 1 July 2013. BHP Billiton interest in saleable production is 57.5%.

(4) Includes Cerro Colorado and Spence.

(5) Iron ore production is reported on a wet tonnes basis.

(6) Shown on 100% basis. BHP Billiton interest in saleable production is 85%.

(7) All production from Wheelarra is now processed via the Jimblebar processing hub.

(8) Metallurgical coal production is reported on the basis of saleable product. Production figures include some thermal coal.

(9) Shown on 100% basis. BHP Billiton interest in saleable production is 80%.

(10) Shown on 100% basis. BHP Billiton interest in saleable production is 90%.

(11) Aluminium smelting at Bayside ceased with the closure of the final potline in June 2014.

(12) Shown on 100% basis. BHP Billiton interest in saleable production is 60%, except Hotazel Manganese Mines which is 44.4%.

(13) Production includes Medium Carbon Ferro Manganese.