Operational Review for the Year Ended 30 June 2015

BHP BILLITON OPERATIONAL REVIEW

FOR THE YEAR ENDED 30 JUNE 2015

- Group production(1) increased by 9% for the 2015 financial year. Over the past two years, production from our core portfolio grew by 27%.

- Petroleum production increased by 4% to a record 256 MMboe, supported by a 67% increase in Onshore US liquids volumes to 56 MMboe.

- Copper production(2) was unchanged at 1.7 Mt as strong operating performance at Escondida offset the impact of a mill outage at Olympic Dam.

- Western Australia Iron Ore production increased by 13% to a record 254 Mt (100% basis), underpinned by productivity gains across the integrated supply chain.

- Metallurgical coal production increased by 13% to a record 43 Mt.

- Three major projects achieved first production during the 2015 financial year, including the Escondida Organic Growth Project 1 which was completed in the June 2015 quarter.

- The demerger of South32 from BHP Billiton was successfully completed during the June 2015 quarter.

- Underlying attributable profit(3) in the June 2015 half year is expected to include additional charges in a range of approximately US$350 million to US$650 million (detail presented on page 2).

BHP Billiton Chief Executive Officer, Andrew Mackenzie, said: "Our businesses performed well over the 2015 financial year. We have improved the performance of our equipment, reduced costs, and increased volumes despite a significant reduction in capital spend. Our simpler portfolio following the demerger of South32 will help us maintain the pace of operational improvement, further supporting cash generation, margins and returns.

"Better productivity will be the sole source of volume growth at Western Australia Iron Ore in the 2016 financial year with production forecast to increase by seven per cent and unit costs are expected to fall to US$16 per tonne(4).

"In Petroleum, through improved recoveries and lower drilling costs, we expect to maintain production in the Black Hawk and Permian in the 2016 financial year despite cutting annual shale investment by over 50 per cent. Although our decision to cut spending in the Onshore US will mean deferring gas volumes in the near term, we expect to realise greater value by developing our acreage later.

"We remain confident that our focus on best-in-class performance together with our unrivalled asset quality, optimal diversification and continued investment in high-return projects, will create long-term value through the cycle and deliver superior returns to our shareholders."

Information has been presented on a continuing operations basis to exclude the contribution from assets that were demerged with South32, unless otherwise noted. Production and sales volumes from discontinued operations are presented on pages 21 and 22.

Operational performance summary

Production for the 2015 financial year and guidance for the 2016 financial year are summarised in the table below.

Major development projects

At the end of the 2015 financial year, BHP Billiton had four major projects under development with a combined budget of US$7.0 billion.

During the year three major projects achieved first production, namely: Escondida Oxide Leach Area Project, BMA Hay Point Stage Three Expansion and Escondida Organic Growth Project 1. The Escondida Organic Growth Project 1 was completed on schedule and revised budget during the June 2015 quarter and is now in the commissioning phase. It will not be reported in future Operational Reviews.

Corporate update

BHP Billiton expects Underlying attributable profit in the June 2015 half year to include additional charges in a range of approximately US$350 million to US$650 million as summarised in the table below.

On 15 July 2015, BHP Billiton announced that it expects to recognise an impairment charge of approximately US$2 billion post-tax (or approximately US$2.8 billion pre-tax) against the carrying value of its Onshore US assets. The Hawkville field accounts for the substantial majority of this charge and the remainder relates to the impairment of goodwill associated with the Petrohawk acquisition. This will be reported as an exceptional item in the June 2015 half year.

The demerger of South32 from BHP Billiton was successfully completed during the period and shares in South32 Limited have been distributed to eligible BHP Billiton shareholders. The Group expects to recognise a net loss on demerger of approximately US$2.1 billion post-tax as an exceptional item in the June 2015 half year(5). The amount is net of the fair value uplift as a result of the change in control of the Manganese business, transaction costs and impairments to the assets upon South32 being classified as held for sale.

The above guidance will be updated should material information or events arise as the Group finalises its financial statements.

On 22 April 2015, the Group priced a three tranche Euro denominated bond under its Euro Medium Term Note Programme. The Euro bond issue comprises EUR600 million Floating Rate Notes due 2020 paying interest at 3 month Euribor plus 35 basis points, EUR650 million 0.750% bonds due 2022 and EUR750 million 1.500% bonds due 2030.

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 2015, the Group had 363 kt of outstanding copper sales that were revalued at a weighted average price of US$2.61 per pound. The final price of these sales will be determined in the 2016 financial year. In addition, 350 kt of copper sales from the 2014 financial year were subject to a finalisation adjustment in 2015. The provisional pricing and finalisation adjustments will decrease earnings before interest and tax by US$382 million in the 2015 financial year (2014 financial year: US$73 million increase).

Petroleum and Potash

Production

Total petroleum production - Total petroleum production for the 2015 financial year increased by four per cent to a record 256 MMboe. Petroleum production is forecast to decrease by seven per cent in the 2016 financial year to 237 MMboe.

In Onshore US, further improvements in drilling and completions efficiency will support stable volumes in the liquids-rich Black Hawk and Permian despite the lower level of capital spend in the 2016 financial year. However, we anticipate a 19 per cent decline in the combined production of the predominantly gas-rich Haynesville, Fayetteville and Hawkville fields as we continue to defer development of these assets for longer-term value. Conventional volumes are expected to decrease by approximately four per cent to 125 MMboe as a result of planned maintenance programs and natural field decline.

Crude oil, condensate and natural gas liquids - Crude oil, condensate and natural gas liquids production for the 2015 financial year increased by 17 per cent to 125 MMboe.

Onshore US liquids volumes for the 2015 financial year rose by 67 per cent to 56 MMboe, exceeding guidance. This strong performance was underpinned by a doubling of liquids production from both the Black Hawk and Permian as we continue to realise significant improvements in shale drilling and completions efficiency.

In our Conventional business, strong uptime performance in the Gulf of Mexico was more than offset by the impact of industrial action at Bass Strait, unplanned maintenance at North West Shelf in the June 2015 quarter and natural field decline across the portfolio. As anticipated, Stybarrow reached the end of its field life and ceased production on 30 June 2015.

Natural gas - Natural gas production for the 2015 financial year declined by six per cent to 787 bcf.

Weaker seasonal demand at Bass Strait, along with lower Onshore US gas volumes as a result of the decision to defer development activity for longer-term value, contributed to the reduction.

Projects

Onshore US development activity

Onshore US drilling and development expenditure for the 2015 financial year was US$3.7 billion, of which approximately US$400 million related to a reduction in capital creditors. Our Onshore US operated rig count decreased from 24 to 10 during the 2015 financial year as we moved quickly in response to lower prices and benefited from significant productivity improvements. We expect Onshore US capital expenditure to be US$1.5 billion in the 2016 financial year with completions activity tailored to market conditions.

(i) Includes land acquisition, site preparation, drilling, completions, well site facilities, mid-stream infrastructure and pipelines.

(ii) Can vary significantly between periods based on changes in rig activity and the inventory of wells drilled but not yet completed at period end.

(iii) Change in productive well count includes the reduction associated with the divestments of Pecos unconventional gas assets (Permian) and North Louisiana conventional assets (Haynesville).

Exploration and appraisal wells drilled during the June 2015 quarter are summarised below.

Petroleum exploration expenditure for the 2015 financial year was US$567 million, of which US$481 million was expensed. Activity for the period was largely focused on the Gulf of Mexico, Western Australia and Trinidad and Tobago.

Copper

Production

Copper - Total copper production(2) for the 2015 financial year was unchanged at 1.7 Mt as strong operating performance at Escondida offset the impact of a mill outage at Olympic Dam. Total copper production is forecast to decrease by 12 per cent in the 2016 financial year to 1.5 Mt.

Escondida copper production for the 2015 financial year increased by six per cent to 1.23 Mt as an 11 per cent improvement in truck utilisation and higher grades more than offset the impact of severe wet weather, water restrictions, industrial action and a power outage throughout Northern Chile. Escondida copper production of approximately 940 kt is forecast for the 2016 financial year as increased throughput, enabled by the completion of the Escondida Organic Growth Project 1 and operational improvements, will only partly offset an anticipated 27 per cent decline in grade. In the medium term, completion of the Escondida Water Supply project and the life extension of Los Colorados will enable utilisation of three concentrators to offset grade decline and support a strong recovery in production.

Pampa Norte copper production for the 2015 financial year increased by seven per cent to 250 kt as Spence benefited from higher recoveries. Production is forecast to remain at a similar level for the 2016 financial year.

Olympic Dam copper production for the 2015 financial year decreased by 32 per cent to 125 kt following an electrical failure which caused a mill outage in January 2015. The mill safely resumed operation in June 2015, ahead of schedule, and is expected to be fully ramped up by the end of July 2015 with an associated increase in full year production anticipated.

Antamina copper production for the 2015 financial year decreased by 25 per cent to 108 kt as lower grades more than offset record mill throughput. Higher average copper grades at Antamina are expected to support an increase in copper volumes in the 2016 financial year.

Projects

Iron Ore

Production

Iron ore - Total iron ore production for the 2015 financial year increased by 14 per cent to a record 233 Mt, exceeding full-year guidance. Total iron ore production is forecast to increase by six per cent in the 2016 financial year to 247 Mt.

Western Australia Iron Ore (WAIO) production of 254 Mt (100 per cent basis) represents a fifteenth consecutive annual record and was underpinned by continued improvement in the performance of our integrated supply chain and the successful ramp-up of the Jimblebar mining hub. Continued optimisation of the port facilities and an increase in direct to ship ore resulted in record sales volumes of 256 Mt (100 per cent basis).

WAIO production for the 2016 financial year is forecast to increase to approximately 270 Mt (100 per cent basis) as a result of improved processing efficiency at Mining Area C and Newman. Further productivity improvements are expected to contribute to an increase in system capacity to 290 Mtpa over time.

On 21 July 2015, BHP Billiton announced it had approved US$240 million (BHP Billiton share) to purchase additional tugs and construct a new tug harbour at Port Hedland to improve the reliability of the port facilities.

Samarco production increased by 33 per cent in the 2015 financial year to 29 Mt (100 per cent basis) as the fourth pellet plant ramped up to full capacity during the March 2015 quarter.

Coal

Production

Metallurgical coal - Metallurgical coal production for the 2015 financial year increased by 13 per cent to a record 43 Mt.

Record production and sales volumes at Queensland Coal in the 2015 financial year were supported by the successful ramp-up of the Caval Ridge mine and continued productivity improvements. An increase in equipment and wash-plant utilisation rates underpinned record volumes at six other operations. Production increased by 18 per cent from the March 2015 quarter which was affected by wet weather and a longwall move at Crinum.

At current mining rates, operations at Crinum are expected to cease in the first quarter of the 2016 calendar year as the mine approaches the end of its economic reserve life.

Production is forecast to decrease in the 2016 financial year to 40 Mt as a result of the closure of Crinum. Longwall moves at the Broadmeadow and Crinum mines, and wash-plant shutdowns at Goonyella and Peak Downs mines are scheduled for the September 2015 quarter. Production is expected to commence from the 1 Mtpa Haju mine in Indonesia during the 2016 financial year.

Energy coal - Energy coal production for the 2015 financial year decreased by five per cent to 41 Mt as anticipated. Lower production reflected drought conditions and the need to manage dust emissions at Cerrejón, as well as reduced customer demand for our Navajo Coal product.

On 2 July 2015, BHP Billiton announced that the sale agreement for the San Juan Mine to Westmoreland Coal Company (WCC) had been executed. Subject to regulatory approval, the transaction is expected to be completed at the end of this calendar year with WCC assuming full operation of the mine from 1 January 2016.

Production is forecast to remain broadly unchanged in the 2016 financial year at 40 Mt(10).

Other

Production

Nickel - Nickel West production for the 2015 financial year decreased by nine per cent to 90 kt and reflected the closure of the Perseverance underground mine in November 2013.

Mineral exploration

Variance analysis relates to the relative performance of BHP Billiton and/or its operations during the 2015 financial year compared with the 2014 financial year, unless otherwise noted. Production volumes, sales volumes and capital and exploration expenditure from subsidiaries are reported on a 100 per cent basis; production and sales volumes from equity accounted investments and other operations are reported on a proportionate consolidation basis.

The following footnotes apply to this Operational Review:

(1) Copper equivalent production based on average realised product prices for the 2013 financial year.

(2) Excludes Pinto Valley which was sold during the 2014 financial year.

(3) Underlying attributable profit and Underlying EBIT are used to reflect the underlying performance of BHP Billiton. Underlying attributable profit is Attributable profit excluding any exceptional items. Underlying EBIT is earnings before net finance costs, taxation and any exceptional items.

(4) Unit cash cost excluding freight and royalties. 2016 financial year guidance is based on an exchange rate of AUD/USD 0.80.

(5) The net loss on demerger will be included as an exceptional item in profit after taxation from discontinued operations in the financial statements.

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

(7) Includes third party product.

(8) Export sales only; excludes Cerrejón. Includes thermal coal sales from metallurgical coal mines.

(9) Well depth as at 30 June 2015; drilling still in progress.

(10) Guidance assumes a full year of production from the San Juan mine.

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

(1) LPG and ethane are reported as natural gas liquids (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. 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) Metallurgical coal production is reported on the basis of saleable product. Production figures include some thermal coal.

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

(1) Other Australia includes Minerva and Macedon.

(2) Gulf of Mexico volumes are net of royalties.

(3) Onshore US volumes are net of mineral holder royalties.

(4) Haynesville includes North Louisiana Conventional. BHP Billiton completed the sale of North Louisiana Conventional on 17 November 2014.

(5) Other Americas includes Neptune, Genesis and Overriding Royalty Interest.

(6) UK includes Bruce/Keith and Liverpool Bay. BHP Billiton completed the sale of its 46.1% operated interest in Liverpool Bay on 31 March 2014.

(7) Total boe conversions are based on 6,000 scf of natural gas equals 1 boe.