BHP Group Limited (BHP): Business Model Canvas

Key Partnerships

BHP Group Limited relies on a network of strategic partnerships to facilitate its mining operations, optimize logistics, leverage technology, and navigate regulatory environments. These key partnerships play a crucial role in enhancing the company's overall value chain and sustainability efforts.

Some of the key partnerships include:

• Joint ventures in mining operations: BHP has formed strategic alliances with other mining companies to collaborate on large-scale mining projects. These joint ventures allow BHP to share resources, risks, and expertise, ultimately driving operational efficiency and profitability.
• Agreements with shipping and logistics companies: BHP partners with shipping and logistics companies to transport its products from mines to ports and then to customers around the world. These partnerships ensure a reliable and cost-effective supply chain, essential for meeting customer demand and maintaining competitive advantage.
• Collaborations with technology providers for mining and exploration: BHP works closely with technology providers to adopt cutting-edge technologies for mining and exploration activities. These partnerships enable BHP to enhance safety, productivity, and sustainability in its operations while staying ahead of industry trends and innovation.
• Partnerships with local governments and communities: BHP engages in partnerships with local governments, communities, and indigenous groups where its operations are located. These partnerships focus on environmental stewardship, social development, and economic empowerment, building trust and long-term relationships with stakeholders.

Key Activities

Mineral exploration and extraction: BHP Group Limited (BHP) is actively involved in the exploration and extraction of various minerals such as iron ore, copper, coal, and petroleum. This involves a rigorous process of identifying mineral deposits, conducting geological surveys, and drilling to extract them from the ground.

Development of mining sites: BHP focuses on the development of mining sites to ensure efficient extraction and processing of minerals. This involves constructing infrastructure such as roads, railways, and processing facilities to support the mining operations.

Processing of minerals: Once the minerals are extracted, BHP processes them to remove impurities, concentrate the desired minerals, and create final products ready for sale. This may involve crushing, grinding, and chemical processing depending on the type of mineral.

Marketing and distribution: BHP markets and distributes its products to customers around the world. This involves developing strong relationships with buyers, negotiating contracts, and ensuring timely delivery of products to meet customer demand. BHP has a global network of offices and distribution centers to facilitate the smooth distribution of its products.

Key Resources

BHP Group Limited (BHP) possesses a variety of key resources that are essential for the operation and success of the company. These resources include:

• Mining rights and licenses: BHP holds significant mining rights and licenses in various countries that allow the company to access and extract natural resources such as iron ore, coal, copper, and nickel. These rights are critical for BHP to continue its mining operations and generate revenue.
• Natural resource deposits: BHP's access to vast natural resource deposits, including iron ore, coal, copper, and nickel, is a key resource that enables the company to extract and sell these valuable commodities. These deposits serve as the foundation of BHP's business model and are crucial for the company's ongoing success.
• Mining equipment and technology: BHP invests in state-of-the-art mining equipment and technology to optimize its operations and increase efficiency. These tools and machinery are essential resources that enable BHP to extract resources safely and efficiently from its mining sites.
• Skilled workforce: BHP employs a skilled workforce of engineers, geologists, miners, and other professionals who are essential for the company's operations. These employees bring valuable expertise and experience to the table, contributing to BHP's success in the highly competitive mining industry.
• Research and development teams: BHP's research and development teams are responsible for driving innovation and developing new technologies that improve the company's mining operations. These teams play a crucial role in ensuring that BHP remains at the forefront of the industry and continues to enhance its capabilities and efficiency.

Value Propositions

BHP Group Limited (BHP) offers a range of value propositions to its customers, stakeholders, and the communities in which it operates. These value propositions form the core of BHP's business model and set it apart in the mining industry.

• Reliable supply of diversified minerals: BHP is known for its reliable supply of a wide range of minerals, including iron ore, copper, coal, and petroleum. With a global presence and extensive mining operations, BHP can ensure a steady supply of these essential resources to its customers.
• Commitment to sustainability and reducing environmental impact: BHP is dedicated to sustainable mining practices and reducing its environmental impact. The company has set ambitious targets to reduce its carbon emissions and water usage, and is continuously investing in initiatives to mitigate its environmental footprint.
• Leading innovation in mining technologies: BHP is at the forefront of innovation in mining technologies, constantly seeking new ways to improve efficiency, productivity, and safety in its operations. The company invests heavily in research and development to drive technological advancements in the mining industry.
• Strong focus on safety and corporate responsibility: Safety is a top priority for BHP, and the company is committed to ensuring the well-being of its employees, contractors, and communities. BHP also upholds high standards of corporate responsibility, engaging with stakeholders and supporting local development initiatives.

Customer Relationships

BHP Group Limited (BHP) values long-term relationships with its customers, particularly industrial users who rely on the company's products for their operations. These long-term contracts provide stability for both parties and ensure a steady source of revenue for BHP. By establishing strong relationships with industrial users, BHP can better understand their needs and provide customized solutions to meet those needs.

To support these relationships, BHP has customer support teams in place to address any issues or concerns that may arise. These teams are dedicated to providing excellent service and ensuring that customers are satisfied with their experience working with BHP.

In addition to traditional customer relationships, BHP also partners with customers on sustainability initiatives. BHP is committed to reducing its environmental impact and working towards a more sustainable future. By partnering with customers on sustainability projects, BHP can collaborate with them to achieve mutual goals and create a positive impact on the environment.

BHP also emphasizes transparency in its operations and corporate governance, building trust with customers by openly sharing information about its business practices. This transparency helps to foster strong relationships with customers and demonstrates BHP's commitment to honesty and integrity in all aspects of its operations.

• Long-term contracts with industrial users
• Customer support teams
• Sustainability partnerships with customers
• Transparency in operations and corporate governance

Channels

BHP Group Limited (BHP) utilizes a variety of channels to reach its customers and facilitate the sale of its products and services. These channels are essential for ensuring that BHP maintains a strong presence in the market and effectively communicates with customers. The following are the key channels used by BHP:

• Direct sales teams: BHP employs direct sales teams to engage with customers and sell products and services. These teams are responsible for building relationships with customers, understanding their needs, and providing tailored solutions.
• Distribution through third-party traders and distributors: BHP works with third-party traders and distributors to expand its reach and ensure efficient distribution of its products. This channel enables BHP to tap into existing distribution networks and reach customers in various markets.
• Online customer portals: BHP has online customer portals that customers can access to place orders, track shipments, and access information about products and services. These portals provide a convenient and user-friendly way for customers to engage with BHP.
• Industry conferences and trade shows: BHP participates in industry conferences and trade shows to showcase its products and services, network with potential customers, and stay up-to-date on industry trends. These events are valuable opportunities for BHP to build brand awareness and generate leads.

Customer Segments

BHP Group Limited (BHP) caters to a wide range of customer segments across various industries. The key customer segments for BHP include:

• Steel manufacturers: BHP provides iron ore, coal, and other resources that are essential for steel production. Steel manufacturers are a significant customer segment for BHP, as they rely on the company for the raw materials needed to produce steel for various applications.
• Energy companies (coal): BHP is a major producer of thermal coal, which is used for electricity generation by energy companies around the world. These companies rely on BHP for a stable and consistent supply of coal to meet their energy needs.
• Construction and infrastructure firms: Construction and infrastructure firms use a variety of resources provided by BHP, including iron ore, copper, and nickel, for building projects such as roads, bridges, and buildings. BHP's products play a crucial role in the construction industry.
• Electronics manufacturers (copper and nickel): BHP supplies copper and nickel, which are essential components in the electronics industry. Electronics manufacturers rely on BHP for a steady supply of these metals to produce a wide range of electronic devices.
• Automotive industry: The automotive industry depends on BHP for resources such as iron ore, nickel, and copper, which are used in the manufacturing of vehicles. BHP's products are crucial in the production of cars, trucks, and other automotive products.

Cost Structure

Operational costs: BHP Group Limited incurs significant operational costs related to mining, processing, and labor. Mining costs include expenses such as equipment maintenance, fuel, and electricity for running mining operations. Processing costs involve the expenses associated with turning raw materials into finished products. Labor costs encompass wages, benefits, and training for employees working in various roles within the organization.

Capital expenditure: BHP invests heavily in capital expenditure for new projects and equipment. This includes the development of new mines, expansion of existing facilities, and the purchase of state-of-the-art machinery and technology to improve operational efficiency and productivity.

Logistics and transportation costs: BHP faces significant costs related to logistics and transportation, including the shipment of raw materials from mine sites to processing facilities and the delivery of finished products to customers worldwide. These costs are influenced by factors such as fuel prices, shipping routes, and transportation infrastructure.

Environmental compliance and rehabilitation costs: BHP is committed to environmental sustainability and invests in compliance measures to ensure that its operations meet regulatory standards. This includes costs associated with environmental monitoring, waste management, and land rehabilitation activities to restore mining sites to their original state after operations cease.

Research and development investments: BHP allocates resources to research and development initiatives to drive innovation and technological advancements in the mining industry. This includes funding for exploration activities, pilot projects, and collaborations with academic institutions and industry partners to enhance operational practices and develop sustainable solutions.

• Operational costs: mining, processing, labor
• Capital expenditure: new projects, equipment
• Logistics and transportation costs
• Environmental compliance and rehabilitation costs
• Research and development investments

Revenue Streams

BHP Group Limited (BHP) generates revenue through multiple streams, including:

• Sale of Extracted and Processed Minerals: BHP's primary source of revenue comes from the sale of extracted and processed minerals, such as iron ore, copper, coal, and nickel. These minerals are in high demand globally, particularly in emerging economies.
• Long-term Contracts with Key Industrial Customers: BHP has established long-term contracts with key industrial customers, including steelmakers and manufacturers, ensuring a steady revenue stream over an extended period. These contracts provide a stable source of income for the company.
• Licensing of Patents and Technologies: BHP also generates revenue through the licensing of patents and technologies related to mining operations. The company's innovative technologies and processes are sought after by other industry players, allowing BHP to monetize its intellectual property.
• Services Related to Mining Consultancy and Technical Expertise: BHP offers consultancy services and technical expertise to other mining companies, providing advice on best practices, sustainability initiatives, and operational efficiencies. These services generate additional revenue for the company while showcasing its industry leadership and expertise.