BHP welcomes China’s goal of carbon neutrality
BHP boss Mike Henry says China’s goal of becoming carbon neutral by 2060 won’t hurt the mining giant’s long-term future.
BHP boss Mike Henry says China’s ambitious goal of becoming carbon neutral by 2060 won’t hurt the mining giant’s long-term future, despite its partial reliance on coking coal and fossil fuel earnings.
President Xi Jinping outlined plans in September for China to hit peak emissions from its power stations and manufacturing before 2030, and achieve carbon neutrality by 2060.
The industrial powerhouse is responsible for about 28 per cent of global carbon emissions and will need to make substantial changes in its industrial heartland to decarbonise its steel, cement and other heavy industry to arrest its emissions profile.
Despite the potential impact to core BHP businesses, Mr Henry told investors listening in on a shareholder briefing on Wednesday that BHP’s shift to a long-term focus on “forward facing” commodities — such as copper, nickel and potash — would put the company in good stead as China worked to transition its economy.
“We welcome the announcement out of China. It’s right in line with the scenarios that we’ve assessed around decarbonisation. A faster decarbonising world is more valuable for BHP. So it’s great to see the reinforcement of that with the recent statements coming out of China. It gives us confidence around the assumptions that we’ve made around the world decarbonising and the ongoing need for BHP’s products,” he said.
“As China decarbonises, the mix of the commodities that they’re going to require will change. But what we’re confident of is that they will still need many of the commodities that BHP produces. We have strong relationships in place with our Chinese customers and suppliers. We’ll look to continue those because they’ve been really good business partners for BHP.”
Since taking on the top BHP job this year, Mr Henry has said he sees copper, nickel and potash as key planks in its portfolio.
But BHP chair Ken MacKenzie remained coy on whether that meant BHP would push ahead with the development of its $5.7bn Jansen potash project in Canada.
In August BHP pushed out a decision on the project until mid-2021, and Mr MacKenzie told shareholders that, although BHP liked the project and the commodity, his management team still had questions to answer about Jansen’s viability.
“We’re spending a fair bit of time at the board working with management looking at the Jansen project and more specifically potash as a commodity,” he said.
“We like potash. It’s very well positioned under several long- term scenarios that we run. We also like the asset — the resource position, Jansen itself. So the question for management is really given that we like the commodity, what’s the best way to create value for shareholders with that position? So that’s what Mike and his team will be bringing to the board next year.”
