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Financial risk management
 12 Months Ended
Jun. 30, 2023
Text block [abstract]  
Financial risk management
24     Financial risk management
24.1 Financial risks
Financial and capital risk management strategy
The financial risks arising from the Group’s operations comprise market, liquidity and credit risk. These risks arise in the normal course of business and the Group manages its exposure to them in accordance with the Group’s portfolio risk management strategy. The objective of the strategy is to support the delivery of the Group’s financial targets, while protecting its future financial security and flexibility by taking advantage of the natural diversification provided by the scale, diversity and flexibility of the Group’s operations and activities.
As part of the risk management strategy, the Group monitors target gearing levels and credit rating metrics under a range of different stress test scenarios incorporating operational and macroeconomic factors.
Market risk management
The Group’s activities expose it to market risks associated with movements in interest rates, foreign currencies and commodity prices. Under the strategy outlined above, the Group seeks to achieve financing costs, currency impacts, input costs and commodity prices on a floating or index basis.
In executing the strategy, financial instruments are potentially employed in three distinct but related activities. The following table summarises these activities and the key risk management processes:
 
Activity
   
Key risk management processes
1   Risk mitigation
 
On an exception basis, hedging for the purposes of mitigating risk related to specific and significant expenditure on investments or capital projects will be executed if necessary to support the Group’s strategic objectives.
   
 
Execution of transactions within approved mandates.
2   Economic hedging of commodity sales, operating costs, short-term cash deposits, other monetary items and debt instruments
   
Where Group commodity production is sold to customers on pricing terms that deviate from the relevant index target and where a relevant derivatives market exists, financial instruments may be executed as an economic hedge to align the revenue price exposure with the index target and US dollars.    Measuring and reporting the exposure in customer commodity contracts and issued debt instruments.
Where debt is issued in a currency other than the US dollar and/or at a fixed interest rate, fair value and cash flow hedges may be executed to align the debt exposure with the Group’s functional currency of US dollars and/or to swap to a floating interest rate.    Executing hedging derivatives to align the total group exposure to the index target.
Where short-term cash deposits and other monetary items are denominated in a currency other than US dollars, derivative financial instruments may be executed to align the foreign exchange exposure to the Group’s functional currency of US dollars.    Execution of transactions within approved mandates.
3   Strategic financial transactions
   
Opportunistic transactions may be executed with financial instruments to capture value from perceived market over/under valuations.    Execution of transactions within approved mandates.
Primary responsibility for the identification and control of financial risks, including authorising and monitoring the use of financial instruments for the above activities and stipulating policy thereon, rests with the Financial Risk Management Committee under authority delegated by the Chief Executive Officer.
Interest rate risk
The Group is exposed to interest rate risk on its outstanding borrowings and short-term cash deposits from the possibility that changes in interest rates will affect future cash flows or the fair value of fixed interest rate financial instruments. Interest rate risk is managed as part of the portfolio risk management strategy.
The majority of the Group’s debt is issued at fixed interest rates. The Group has also drawn on a facility of US$5.0 billion to fund the acquisition of OZL that was referenced to floating rates. The Group has entered into interest rate swaps and cross currency interest rate swaps to convert most of its fixed interest rate exposure to floating US dollar interest rate exposure. As at 30 June 2023, 98 per cent of the Group’s borrowings were exposed to floating interest rates inclusive of the effect of swaps (2022: 80 per cent).
The fair value of interest rate swaps and cross currency interest rate swaps in hedge relationships used to hedge both interest rate and foreign currency risks are shown in the valuation hierarchy in section 24.4 ‘Derivatives and hedge accounting’.
Based on the net debt position as at 30 June 2023, taking into account interest rate swaps and cross currency interest rate swaps, it is estimated that a one percentage point increase in the Secured Overnight Financing Rate (SOFR) interest rate will decrease the Group’s equity and profit after taxation by US$58 million (2022: increase of US$29 million). This assumes the change in interest rates is effective from the beginning of the financial year and the fixed/floating mix and balances are constant over the year.
 
Interest Rate Benchmark Reform
The London Interbank Offered Rate (LIBOR) and other benchmark interest rates are being replaced by alternative risk-free rates (ARR) as part of inter-bank offer rate (IBOR) reform. Sterling LIBOR ceased to be published on 1 January 2022 and USD LIBOR will no longer be published after 30 June 2023.
Amendments to IFRS 9/AASB 9 ‘Financial Instruments’, IFRS 7/AASB 7 ‘Financial Instruments: Disclosures’ and IFRS 16/AASB 16 ‘Leases’ in relation to IBOR reform early adopted by the Group in previous periods impact the Group’s cross currency and interest rate swaps, which prior to IBOR reform referenced the US LIBOR benchmark, and the associated hedge accounting.
These amendments provide relief from applying certain hedge accounting requirements to hedging arrangements directly impacted by IBOR reform. In particular, where changes to the Group’s instruments arise solely as a result of IBOR reform and do not change the economic substance of the Group’s arrangements, the Group is able to maintain its existing hedge relationships and accounting.
During the year ended 30 June 2023, the Group actively transitioned all impacted cross currency and interest rate swaps from US LIBOR to the alternative, widely adopted SOFR benchmark. As the transition resulted solely from IBOR reform, the Group has applied the relief available in IFRS 9 and continues to apply hedge accounting to its hedging arrangements, including accounting for ineffectiveness. Refer to section 24.4 ‘Derivatives and hedge accounting’ for further information.
The Group does not hold any material lease arrangements that contain reference to the existing benchmarks and as a result there is no material impact on lease liabilities or right-of-use assets at 30 June 2023.
The Group’s revolving credit facility was restructured to reference to Alternative Reference Rates (ARRs) and remains undrawn. Furthermore, in the period, Escondida has executed new SOFR linked loans and has amended existing US LIBOR linked loans with lenders, so that the applicable floating interest rate reference 3M or 6M Term SOFR rates.
Currency risk
The US dollar is the predominant functional currency within the Group and as a result, currency exposures arise from transactions and balances in currencies other than the US dollar. The Group’s potential currency exposures comprise:
 
•  
translational exposure in respect of non-functional currency monetary items
 
•  
transactional exposure in respect of non-functional currency expenditure and revenues
The Group’s foreign currency risk is managed as part of the portfolio risk management strategy.
Translational exposure in respect of non-functional currency monetary items
Monetary items, including financial assets and liabilities, denominated in currencies other than the functional currency of an operation are restated at the end of each reporting period to US dollar equivalents and the associated gain or loss is taken to the income statement. The exception is foreign exchange gains or losses on foreign currency denominated provisions for closure and rehabilitation at operating sites, which are capitalised in property, plant and equipment.
The Group has entered into cross currency interest rate swaps and foreign exchange forwards to convert its significant foreign currency exposures in respect of monetary items into US dollars. Fluctuations in foreign exchange rates are therefore not expected to have a significant impact on equity and profit after tax.
The following table shows the carrying values of financial assets and liabilities at the end of the reporting period denominated in currencies other than the US dollar that are exposed to foreign currency risk:
 
Net financial (liabilities)/assets - by currency of denomination
   
2023
     2022  
    
US$M
     US$M  
AUD
     
(4,168
)
 		     (3,649 ) 
CLP
     
(74
)
 		     (602 ) 
GBP
     
353
       388  
EUR
     
217
       280  
Other
     
43
       187  
    
 
 
    
 
 
  
Total
     
(3,629
)
 		     (3,396 ) 
    
 
 
    
 
 
  
The principal non-functional currencies to which the Group is exposed are the Australian dollar, the Chilean peso, the Pound sterling and the Euro. Based on the Group’s net financial assets and liabilities as at 30 June 2023, a weakening of the US dollar against these currencies (one cent strengthening in Australian dollar, 10 pesos strengthening in Chilean peso, one penny strengthening in Pound sterling and one cent strengthening in Euro), with all other variables held constant, would decrease the Group’s equity and profit after taxation by US$15 million (2022: decrease of US$16 million).
Transactional exposure in respect of non-functional currency expenditure and revenues
Certain operating and capital expenditure is incurr
e
d in currencies other than an operation’s functional currency. To a lesser extent, certain sales revenue is earned in currencies other than the functional currency of operations and certain exchange control restrictions may require that funds be maintained in currencies other than the functional currency of the operation. These currency risks are managed as part of the portfolio risk management strategy. The Group may enter into forward exchange contracts when required under this strategy.
Commodity price risk
The risk associated with commodity prices is managed as part of the portfolio risk management strategy. Substantially all of the Group’s commodity production is sold on market-based index pricing terms, with derivatives used from time to time to achieve a specific outcome.
Financial instruments with commodity price risk comprise forward commodity and other derivative contracts with net liabilities at fair value of US$20 million (2022: net liabilities of US$56 million).
Provisionally priced commodity sales and purchases contracts
Provisionally priced sales or purchases volumes are those for which price finalisation, referenced to the relevant index, is outstanding at the reporting date. Provisional pricing mechanisms within these sales and purchases arrangements have the character of a commodity derivative. Trade receivables or payables under these contracts are carried at fair value through profit or loss using Level 2 valuation inputs based on forecast selling prices in the quotation period. The Group’s exposure at 30 June 2023 to the impact of movements in commodity prices upon provisionally invoiced sales and purchases volumes was predominately around copper.
The Group had 314 thousand tonnes of copper exposure as at 30 June 2023 (2022: 289 thousand tonnes) that was provisionally priced. The final price of these sales and purchases volumes will be determined during the first half of FY2024. A 10 per cent change in the price of copper realised on the provisionally priced sales, with all other factors held constant, would increase or decrease profit after taxation by US$184 million (2022: US$162 million).
The relationship between commodity prices and foreign currencies is complex and movements in foreign exchange rates can impact commodity prices.
Liquidity risk
Refer to note 21 ‘Net debt’ for details on the Group’s liquidity risk.
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarily from customer receivables) and from its financing activities, including deposits with banks and financial institutions, other short-term investments, interest rate and currency derivative contracts and other financial instruments.
Refer to note 8 ‘Trade and other receivables’ and note 21 ‘Net debt’ for details on the Group credit
risk.
24.2 Recognition and measurement
All financial assets and liabilities, other than derivatives and trade receivables, are initially recognised at the fair value of consideration paid or received, net of transaction costs as appropriate. Financial assets are initially recognised on their trade date.
Financial assets are subsequently carried at fair value or amortised cost based on:
 
•  
the Group’s purpose, or business model, for holding the financial asset
 
•  
whether the financial asset’s contractual terms give rise to cash flows that are solely payments of principal and interest
The resulting Financial Statements classifications of financial assets can be summarised as follows:
 
Contractual cash flows
   
Business model
   
Category
Solely principal and interest    Hold in order to collect contractual cash flows    Amortised cost
     
Solely principal and interest    Hold in order to collect contractual cash flows and sell    Fair value through other comprehensive income
     
Solely principal and interest    Hold in order to sell    Fair value through profit or loss
     
Other    Any of those mentioned above    Fair value through profit or loss
Solely principal and interest refers to the Group receiving returns only for the time value of money and the credit risk of the counterparty for financial assets held. The main exceptions for the Group are provisionally priced receivables and derivatives which are measured at fair value through profit or loss under IFRS 9.
The Group has the intention of collecting payment directly from its customers in most cases, however the Group also participates in receivables financing programs in respect of selected customers. Receivables in these portfolios which are classified as ‘hold in order to sell’, are provisionally priced receivables and are therefore held at fair value through profit or loss prior to sale to the financial institution.
With the exception of derivative contracts and provisionally priced trade payables which are carried at fair value through profit or loss, the Group’s financial liabilities are classified as subsequently measured at amortised cost.
The Group may in addition elect to designate certain financial assets or liabilities at fair value through profit or loss or to apply hedge accounting where they are not mandatorily held at fair value through profit or loss.

Fair value measurement
The carrying amount of financial assets and liabilities measured at fair value is principally calculated based on inputs other than quoted prices that are observable for these financial assets or liabilities, either directly (i.e. as unquoted prices) or indirectly (i.e. derived from prices). Where no price information is available from a quoted market source, alternative market mechanisms or recent comparable transactions, fair value is estimated based on the Group’s views on relevant future prices, net of valuation allowances to accommodate liquidity, modelling and other risks implicit in such estimates.
The inputs used in fair value calculations are determined by the relevant segment or function. The functions support the assets and operate under a defined set of accountabilities authorised by the Executive Leadership Team. Movements in the fair value of financial assets and liabilities may be recognised through the income statement or in other comprehensive income according to the designation of the underlying instrument.
For financial assets and liabilities carried at fair value, the Group uses the following to categorise the inputs to the valuation method used based on the lowest level input that is significant to the fair value measurement as a whole:
 
IFRS 13 Fair value hierarchy
  
Level 1
  
Level 2
  
Level 3
Valuation inputs   Based on quoted prices (unadjusted) in active markets for identical financial assets and liabilities.   Based on inputs other than quoted prices included within Level 1 that are observable for the financial asset or liability, either directly (i.e. as unquoted prices) or indirectly (i.e. derived from prices).   Based on inputs not observable in the market using appropriate valuation models, including discounted cash flow modelling.
24.3 Financial assets and liabilities
The financial assets and liabilities are presented by class in the table below at their carrying amounts.
 
    
IFRS 13
Fair value
hierarchy
Level
1
     
IFRS 9 Classification
   
2023

US$M
      2022
US$M		  
Current cross currency and interest rate swaps
2
      2      Fair value through profit or loss     
34
        –  
Current other derivative contracts
3
      2,3      Fair value through profit or loss     
407
        326  
Current other financial assets
             Amortised cost     
–
        100  
Current other investments
4
      1,2      Fair value through profit or loss     
29
        203  
Non-current cross currency and interest rate swaps
2
      2      Fair value through profit or loss     
149
        136  
Non-current other derivative contracts
3
      2,3      Fair value through profit or loss     
228
        16  
Non-current other financial assets
5
      3      Fair value through profit or loss     
246
        273  
Non-current investment in shares
      1,3      Fair value through other comprehensive income     
224
        138  
Non-current other investments
4
      1,2      Fair value through profit or loss     
268
        239  
                  
 
 
     
 
 
  
Total other financial assets
                   
1,585
        1,431  
Cash and cash equivalents
             Amortised cost     
12,428
        17,236  
Trade and other receivables
6
             Amortised cost     
1,506
        1,674  
Provisionally priced trade receivables
      2      Fair value through profit or loss     
2,705
        3,478  
                  
 
 
     
 
 
  
Total financial assets
                   
18,224
        23,819  
                  
 
 
     
 
 
  
Non-financial assets
                   
83,072
        71,347  
                  
 
 
     
 
 
  
Total assets
                   
101,296
        95,166  
                  
 
 
     
 
 
  
                                 
Current cross currency and interest rate swaps
2
      2      Fair value through profit or loss     
147
        358  
Current other derivative contracts
      2      Fair value through profit or loss     
176
        118  
Current other financial liabilities
7
             Amortised cost     
79
        103  
Non-current cross currency and interest rate swaps
2
      2      Fair value through profit or loss     
1,608
        1,466  
Non-current other derivative contracts
3
      2,3      Fair value through profit or loss     
82
        31  
Non-current other financial liabilities
7
             Amortised cost     
467
        500  
                  
 
 
     
 
 
  
Total other financial liabilities
                   
2,559
        2,576  
Trade and other payables
8
             Amortised cost     
5,338
        5,223  
Provisionally priced trade payables
      2      Fair value through profit or loss     
841
        1,385  
Bank overdrafts and short-term borrowings
9
             Amortised cost     
5
        –  
Bank loans
9
             Amortised cost     
7,502
        2,472  
Notes and debentures
9
             Amortised cost     
11,819
        11,363  
Lease liabilities
10
                   
3,019
        2,576  
Other
9
             Amortised cost     
–
        17  
                  
 
 
     
 
 
  
Total financial liabilities
                   
31,083
        25,612  
                  
 
 
     
 
 
  
Non-financial liabilities
                   
21,683
        20,788  
                  
 
 
     
 
 
  
Total liabilities
                   
52,766
        46,400  
                  
 
 
     
 
 
  
 
1
 
All of the Group’s financial assets and financial liabilities recognised at fair value were valued using market observable inputs categorised as Level 2 unless specified otherwise in the following footnotes.
 
2
 
Cross currency and interest rate swaps are valued using market data including interest rate curves and foreign exchange rates. A discounted cash flow approach is used to derive the fair value of cross currency and interest rate swaps at the reporting date.
 
3
 
Includes net other derivative assets of US$
46
million related to power purchase contract agreements that are categorised as Level 3 (2022: US$ nil). 
 
4
 
Includes investments held by BHP Foundation which are restricted and not available for general use by the Group of US$290 million (2022: US$252 million) of which other investment
s
(mainly US Treasury Notes) of US$
138
million categorised as Level 1 (2022: US$119 million).
 
5
 
Includes receivables contingent on outcome of future events relating to mining and regulatory approvals of US$246 million (2022: US$233 million).
 
6
 
Excludes input taxes of US$531 million (2022: US$427 million) included in other receivables.
 
7
 
Includes the discounted settlement liability in relation to the cancellation of power contracts at the Group’s Escondida operations.
 
8
 
Excludes input taxes of US$121 million (2022: US$79 million) included in other payables.
 
9
 
All interest bearing liabilities, excluding lease liabilities, are unsecured.
 
10
 
Lease liabilities are measured in accordance with IFRS 16/AASB 16 ‘Leases’.
The carrying amounts in the table above generally approximate to fair value. In the case of US$534 million (2022: US$3,018 million) of fixed rate debt not swapped to floating rate, the fair value at 30 June 2023 was US$
538
million (2022: US$3,126 million). The fair value is determined using a method that can be categorised as Level 2 and uses inputs based on benchmark interest rates, alternative market mechanisms or recent comparable transactions.
For financial instruments that are carried at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the fair value hierarchy by reassessing categorisation at the end of each reporting period. There were no transfers between categories during the period.
Offsetting financial assets and liabilities
The Group enters into money market deposits and derivative transactions under International Swaps and Derivatives Association master netting agreements that do not meet the offsetting criteria in IAS 32/AASB 132 ‘Financial Instruments: Presentation’, but allow for the related amounts to be set-off in certain circumstances. The amounts set out as cross currency and interest rate swaps in the table above represent the derivative financial assets and liabilities of the Group that may be subject to the above arrangements and are presented on a gross
basis.
24.4    Derivatives and hedge accounting
The Group uses derivatives to hedge its exposure to certain market risks and may elect to apply hedge accounting.
Hedge accounting
Derivatives are included within financial assets or liabilities at fair value through profit or loss unless they are designated as effective hedging instruments. Financial instruments in this category are classified as current if they are due or expected to be settled within 12 months otherwise they are classified as non-current.
Where hedge accounting is applied, at the start of the transaction, the Group documents the type of hedge, the relationship between the hedging instrument and hedged items and its risk management objective and strategy for undertaking various hedge transactions. The documentation also demonstrates that the hedge is expected to be effective.
The Group applies the following types of hedge accounting to its derivatives hedging the interest rate and currency risks of its notes and debentures:
 
•  
Fair value hedges – the fair value gain or loss on interest rate and cross currency swaps relating to interest rate risk, together with the change in the fair value of the hedged fixed rate borrowings attributable to interest rate risk are recognised immediately in the income statement. If the hedge no longer meets the criteria for hedge accounting, the fair value adjustment on the note or debenture is amortised to the income statement over the period to maturity using a recalculated effective interest rate.
 
•  
Cash flow hedges – changes in the fair value of cross currency interest rate swaps which hedge foreign currency cash flows on the notes and debentures are recognised directly in other comprehensive income and accumulated in the cash flow hedging reserve. To the extent a hedge is ineffective, changes in fair value are recognised immediately in the income statement.
When a hedging instrument expires, or is sold, terminated or exercised, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is amortised to the income statement over the period to the hedged item’s maturity.
When hedged, the Group hedges the full notional value of notes or debentures. However, certain components of the fair value of derivatives are not permitted under IFRS 9 to be included in the hedge accounting above. Certain costs of hedging are permitted to be recognised in other comprehensive income. Any change in the fair value of a derivative that does not qualify for hedge accounting, or is ineffective in hedging the designated risk due to contractual differences between the hedged item and hedging instrument, is recognised immediately in the income statement.
The table below shows the carrying amounts of the Group’s notes and debentures by currency and the derivatives which hedge them:
 
•  
The carrying amount of the notes and debentures includes foreign exchange remeasurement to period-end rates and fair value adjustments when included in a fair value hedge.
 
•  
The breakdown of the hedging derivatives includes remeasurement of foreign currency notional values at period-end rates, fair value movements due to interest rate risk, foreign currency cash flows designated into cash flow hedges, costs of hedging recognised in other comprehensive income, ineffectiveness recognised in the income statement and accruals or prepayments.
 
•  
The hedged value of notes and debentures includes their carrying amounts adjusted for the offsetting derivative fair value movements due to foreign currency and interest rate risk remeasurement.
 
 
  
 
 
  
Fair value of derivatives
 
  
 
 
2023
US$M                                    
  
Carrying
amount of
notes and
debentures
 
  
Foreign
exchange
notional
at spot
rates
 
  
Interest
rate risk
 
 
Recognised
in cash flow
hedging
reserve
 
 
Recognised
in cost of
hedging
reserve
 
 
Recognised
in the
income
statement
1
 
 
Accrued
cash
flows
 
 
Total
 
  
Hedged
value of
notes and
debentures
2
 
 
  
A
 
  
B
 
  
C
 
 
D
 
 
E
 
 
F
 
 
G
 
 
B to G
 
  
A + B + C
 
USD
     
7,245
       
–
       
214
      
–
      
–
      
32
      
23
      
269
       
7,459
  
GBP
     
1,566
       
522
       
274
      
24
      
(9
)
 		    
(69
)
 		    
35
      
777
       
2,362
  
EUR
     
3,008
       
434
       
302
      
(39
)
 		    
10
      
(49
)
 		    
(132
)
 		    
526
       
3,744
  
    
 
 
     
 
 
     
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
     
 
 
  
Total
     
11,819
       
956
       
790
      
(15
)
 		    
1
      
(86
)
 		    
(74
)
 		    
1,572
       
13,565
  
    
 
 
     
 
 
     
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
     
 
 
  
       
            Fair value of derivatives         
2022
US$M                                    
    Carrying
amount of
notes and
debentures		      Foreign
exchange
notional
at spot
rates		      Interest
rate risk		     Recognised
in cash flow
hedging
reserve		     Recognised
in cost of
hedging
reserve		     Recognised
in the
income
statement
1
     Accrued
cash
flows		     Total      Hedged
value of
notes and
debentures
2
  
     A      B      C     D     E     F     G     B to G      A + B + C  
USD
      4,740        –        (16 )      –       –       (7 )      86       63        4,724  
GBP
      2,599        796        (115 )      (35 )      13       26       42       727        3,280  
EUR
      3,449        585        112       (16 )      8       (4 )      45       730        4,146  
CAD
      575        167        5       (8 )      6       (3 )      1       168        747  
    
 
 
     
 
 
     
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
     
 
 
  
Total
      11,363        1,548        (14 )      (59 )      27       12       174       1,688        12,897  
    
 
 
     
 
 
     
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
     
 
 
  
 
1
 
Predominantly related to ineffectiveness.
 
2
 
Includes US$534 million (2022: US$3,018 million) of fixed rate debt not swapped to floating rate that is not in a hedging relationship.
The weighted average interest rate payable is USD SOFR +1.54 per cent (2022: USD LIBOR + 1.74 per cent). Refer to note 23 ‘Net finance costs’ for details of net finance costs for the year.
Movements in reserves relating to hedge accounting
The following table shows a reconciliation of the components of equity and an analysis of the movements in reserves for all hedges. For a description of these reserves, refer to note 18 ‘Other equity’.
 
2023
US$M
   
Cash flow hedging
reserve
    
Cost of hedging
reserve
    
Total
  
    
Gross
    
Tax
    
Net
    
Gross
    
Tax
    
Net
        
At the beginning of the financial year
     
59
      
(18
)
 		    
41
      
(27
)
 		    
8
      
(19
)
 		    
22
  
Add: Change in fair value of hedging instrument recognised in OCI
     
95
      
(29
)
 		    
66
      
–
      
–
      
–
      
66
  
Less: Reclassified from reserves to financial expenses – recognised through OCI
     
(174
)
 		    
53
      
(121
)
 		    
26
      
(8
)
 		    
18
      
(103
)
 
Less: Loss/(gain) transferred to balance sheet related items
     
35
      
(11
)
 		    
24
      
–
      
–
      
–
      
24
  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
At the end of the financial year
     
15
      
(5
)
 		    
10
      
(1
)
 		    
–
      
(1
)
 		    
9
  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
       
2022
US$M
    Cash flow hedging
reserve		     Cost of hedging
reserve		     Total  
     Gross     Tax     Net     Gross     Tax     Net        
At the beginning of the financial year
      142       (42 )      100       (77 )      23       (54 )      46  
Add: Change in fair value of hedging instrument recognised in OCI
      (914 )      274       (640 )     
–
      
–
      
–
       (640 ) 
Less: Reclassified from reserves to financial expenses – recognised through OCI
      831       (250 )      581       50       (15 )      35       616  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
At the end of the financial year
      59       (18 )      41       (27 )      8       (19 )      22  
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
 
Changes in interest bearing liabilities and related derivatives resulting from financing activities
The movement in the y
e
ar in the Group’s interest bearing liabilities and related derivatives are as follows:
 
    
Interest bearing liabilities
    
Derivatives
Liabilities/
(assets)
       
2023
US$M
   
Bank
loans
    
Notes and
debentures
    
Lease
liabilities
    
Bank
overdraft
and

short-term
borrowings
     
Other
    
Cross
currency
and
interest
rate swaps
    
Total
  
At the beginning of the financial year
     
2,472
      
11,363
      
2,576
      
–
       
17
      
1,688
          
Proceeds from interest bearing liabilities
     
5,450
      
2,732
      
–
      
–
       
–
      
–
      
8,182
  
Settlements of debt related instruments
     
–
      
–
      
–
      
–
       
–
      
(677
)
 		    
(677
)
 
Repayment of interest bearing liabilities
     
(1,087
)
 		    
(1,610
)
 		    
(576
)
 		    
–
       
(16
)
 		    
–
      
(3,289
)
 
    
 
 
    
 
 
    
 
 
    
 
 
     
 
 
    
 
 
    
 
 
  
Change from Net financing cash flows
     
4,363
      
1,122
      
(576
)
 		    
–
       
(16
)
 		    
(677
)
 		    
4,216
  
    
 
 
    
 
 
    
 
 
    
 
 
     
 
 
    
 
 
    
 
 
  
Other movements:
                                                          
Acquisition of subsidiaries and operations
     
688
      
–
      
423
      
–
       
–
      
–
          
Interest rate impacts
     
–
      
(803
)
 		    
–
      
–
       
–
      
691
          
Foreign exchange impacts
     
(23
)
 		    
128
      
12
      
–
       
–
      
(127
)
 		        
Lease additions
     
–
      
–
      
542
      
–
       
–
      
–
          
Remeasurement of index-linked freight contracts
     
–
      
–
      
53
      
–
       
–
      
–
          
Other interest bearing liabilities/derivative related changes
     
2
      
9
      
(11
)
 		    
5
       
(1
)
 		    
(3
)
 		        
    
 
 
    
 
 
    
 
 
    
 
 
     
 
 
    
 
 
          
At the end of the financial year
     
7,502
      
11,819
      
3,019
      
5
       
–
      
1,572
          
    
 
 
    
 
 
    
 
 
    
 
 
     
 
 
    
 
 
          
 
     Interest bearing liabilities     Derivatives
(assets)/
liabilities		        
2022
US$M
    Bank
loans		     Notes and
debentures		     Lease
liabilities		     Bank
overdraft and
short-term
  borrowings  		      Other     Cross
currency
and
interest
rate swaps		     Total  
At the beginning of the financial year
      2,260       14,769       3,896       –        58       (557 )         
Proceeds from interest bearing liabilities
      1,150       –       –       –        14       –       1,164  
Settlements of debt related instruments
      –       –       –       –        –       –       –  
Repayment of interest bearing liabilities
1
      (941 )      (1,232 )      (1,163 )      –        (55 )      –       (3,391 ) 
    
 
 
    
 
 
    
 
 
    
 
 
     
 
 
    
 
 
    
 
 
  
Change from Net financing cash flows
      209       (1,232 )      (1,163 )      –        (41 )      –       (2,227 ) 
    
 
 
    
 
 
    
 
 
    
 
 
     
 
 
    
 
 
    
 
 
  
Other movements:
                                                          
Divestment and demerger of subsidiaries and operations
      –       –       (492 )      –        –       –          
Interest rate impacts
      –       (1,286 )      –       –        –       1,277          
Foreign exchange impacts
      3       (894 )      (126 )      –        (2 )      898          
Lease additions
      –       –       866       –        –       –          
Remeasurement of index-linked freight contracts
      –       –       (369 )      –        –       –          
Other interest bearing liabilities/derivative related changes
      –       6       (36 )      –        2       70          
    
 
 
    
 
 
    
 
 
    
 
 
     
 
 
    
 
 
          
At the end of the financial year
      2,472       11,363       2,576       –        17       1,688          
    
 
 
    
 
 
    
 
 
    
 
 
     
 
 
    
 
 
          
 
1
 
FY2022 includes US$33 million of Discontinued operations cash flows.