BHP GROUP LIMITED DISCLOSUREOther Disclosures

Market Risk

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 Execution of transactions within approved on investments or capital projects will be executed if necessary to support the Group’s strategic objectives. 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 Measuring and reporting the exposure in target and where a relevant derivatives market exists, financial instruments may be executed as an economic customer commodity contracts and issued hedge to align the revenue price exposure with the index target and US dollars. 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 Executing hedging derivatives to align the flow he