TIDMBHP
RNS Number : 9760Y
BHP Group PLC
18 May 2021
Issued by: BHP Group Plc
Date: 18 May 2021
To: London Stock Exchange
JSE Limited
For Release: Immediately
Authorised for lodgement Stefanie Wilkinson
by: Group Company Secretary
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BHP - Bank of America Metals, Mining and Steel Conference Presentation
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Financial Conduct Authority Submissions
The following document has today been submitted to the FCA
National Storage Mechanism and will shortly be available for
inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism:
- BHP Bank of America Metals, Mining and Steel Conference Presentation
BHP CEO, Mike Henry, will present at the Bank of America Metals,
Mining and Steel Conference today.
A copy of the speech is attached.
The presentation and speech are available on BHP's website at:
https://www.bhp.com/investor-centre/investor-presentations-and-briefings/
The webcast of the presentation will be available at:
http://www.veracast.com/webcasts/bofa/globalmetalsminingandsteel2021/id8I309l.cfm
BHP Group Plc Registration number 3196209
LEI 549300C116EOWV835768 Registered in England and Wales
Registered Office: Nova South, 160 Victoria Street, London SW1E
5LB United Kingdom
A member of the BHP Group which is headquartered in
Australia
Positioned for the future
Thank you. It's great to have the opportunity to join you
again.
Just before I turn to the main topics I am going to speak to
today, I want to start by saying how pleased I am with how the
company is performing.
We are safer and delivering more reliable performance. This,
coupled with the quality of our assets and our disciplined cost
control, is allowing us to secure maximum benefit from the record
high iron ore and copper prices.
We have delivered a number of major projects in the past twelve
months - the 185 thousand tonne per annum expansion at the Spence
copper asset, Atlantis Phase 3 and the Ruby project in Petroleum,
and in the next few days we will announce first production at the
80 million tonne per annum South Flank iron ore project, with its
higher grade and lump fraction. All brought in on time and on
budget in spite of COVID-19, and perfectly timed given where copper
and iron ore prices are at.
We had the counter-cyclical acquisition of an extra stake in the
Shenzi asset in Petroleum. And we have secured more exploration
partnerships and early stage growth opportunities in copper and
nickel. Finally, we have made marked progress on our efforts to
reduce operational emissions and have signed a number of
partnerships with others in the value chain targeted at reducing
Scope 3 emissions. So overall, the company is really going well at
the moment.
Building upon this strong near term performance though, today I
want to talk about two things:
- Firstly, the critical need for resources in meeting the
world's decarbonisation challenge and to support global economic
growth and development.
- And secondly, BHP's commitment to playing a leading role in
ensuring these demands get met sustainably.
We are optimistic for the future. We believe the world can both
decarbonise and achieve the higher living standards that people
aspire to. We are at the centre of both these aims.
R ecent times have seen greater uncertainty and volatility in
markets and geopolitics, and growing expectations on the part of
shareholders, communities and broader society. In addition, there
are increasing technical and financial challenges in finding and
developing the fresh supply required in some commodities.
Successful companies will be those with a clear strategy and
sense of purpose, who are exceptional operators and allocators of
capital, are in tune with the changing world around them and who
focus on bringing this all together to create long-term value for
all their stakeholders. This is BHP. We have built the
organisational capability, relationships and balance sheet strength
to allow us to thrive in this environment.
The outlook for our commodities is compelling.
Government stimulus and pro-growth agendas, which are expected
to remain in place for an extended period, are anticipated to lead
to robust growth, a lift in inflation and solid demand for mineral
resources and oil and gas.
This is occurring at a time when our industry's capital
discipline and decline in exploration success over a number of
years means there are fewer high quality growth projects in the
industry pipeline to meet this demand.
The drive to more rapidly decarbonise the globe may also
accelerate demand for many of the products we produce. A growing
number of governments are committing to tackling climate change
with greater ambition and are cooperating to do so.
A transition to a world where warming is limited to no more than
1.5 degrees above pre-industrial levels is positive for BHP and
would allow us to create significant value.
In a Paris-aligned scenario (1), we expect a more than doubling
of the amount of primary copper and a quadrupling of the amount of
primary nickel demand over the next 30 years, as was produced over
the last 30. Demand for steel will almost double on this basis, and
potash will be vital for more efficient agricultural practices. And
as the shift to cleaner energy sources occurs, the world will still
need oil and gas to power mobility and everyday life on its pathway
to decarbonisation.
The world is going to need more supply of some commodities in
order to continue to grow and to make the transition to cleaner
energy.
The level of global effort, innovation and coordination to limit
warming to 1.5 degrees is massive. However, the commitment and
intention for the future is becoming clearer.
At BHP for over 130 years we have been reliably providing our
customers with high quality supply of the commodities they need and
for the world to grow. Like our purpose says, we have been bringing
people and resources together to build a better world.
The world is continuing to evolve and it is doing so in a way
that plays to BHP's strengths.
We are running our operations exceptionally well. We are safer,
more reliable, and more productive than ever before. We have now
had almost two and a half years fatality free, an exceptional
result. And our two largest assets, Western Australia Iron Ore and
our Escondida copper mine, have continued to set production and
throughput records, while delivering excellent cost
performance.
We remain hungry to improve. We have redoubled our focus on
becoming even safer. We are systematically unlocking even greater
performance from our equipment and infrastructure. We are enabling
our people and are investing in capability - be it in trade skills,
through our FutureFit Academy and Operations Services, or technical
skills, through our centres of excellence. And we are underpinning
this by ensuring we have an inclusive and diverse workforce.
Our portfolio is well-positioned. We produce commodities
essential to everyday life, global economic growth and the energy
transition. Around 60 per cent (2) of our production is in
commodities that support steel-making, which we anticipate will see
strong demand as the world decarbonises.
Around one quarter (2) of our portfolio is currently in 'future
facing commodities', which for us are copper, nickel and potash,
and we expect to grow this over the coming years. This includes an
increase in average copper production over the next five years of
more than 300 thousand tonnes per annum (3), equivalent to adding
another Spence to the portfolio.
Given our rock-solid foundations of a strong balance sheet and
disciplined approach to capital allocation, we are positioned well
to be able to continue to pursue new opportunities for growth.
As we have done for over a century, we will continue to meet the
world's changing and growing demand for commodities.
There is though an obvious tension between the world's need for
more resources and the need to make the world more sustainable:
both for people and for the environment. It is essential that both
are achieved. Growing demand must be met ever more sustainably.
This requires alignment between resources companies like BHP,
investors and society on how best to navigate this tension. Better
alignment will enable the transition to be achieved more
sustainably, quickly and cost effectively. Conversely, a lack of
alignment will result in poorer sustainability outcomes, and slower
and more costly progress on the energy transition.
BHP is committed to continuing to create value for shareholders
and all of its stakeholders. We will continue to demonstrate
leadership on sustainability, including on climate change.
We have been taking real action on climate for decades. Most of
our assets are already at the lower end of their respective
emissions intensity curves, and we are working to lower them
further.
Consistent with our commitment to reduce operational emissions
by at least 30 per cent by 2030 (4) and be net zero by 2050, a
number of our assets are on the way to having a substantial
portion, or even all, their electricity provided by renewables.
Beyond greening our electricity supplies, we will decarbonise
our mining equipment, through displacing diesel. This is a much
more complex task but we are partnering with industry and equipment
manufacturers to drive this transition.
Outside our operations, we are working with others in our value
chain to develop solutions for hard-to-abate emissions.
For example, we are working with some of the world's leading
steel makers, and with technology start-ups, to identify pathways
and develop technologies to reduce steel-making emissions. Over the
past six months, we have established partnerships with three major
steelmakers in China and Japan, whose combined output equates to
around 10 per cent of global steel production - more than that
produced in all of Europe.
And, as one of the world's largest bulk freight charterers, we
are working with the maritime industry to support greener freight.
We have pioneered the world's first tender for LNG-fuelled bulk
carriers; successfully completed a trial of marine biofuels; and,
just last month, were the only resources company to become a
founding member of the Maritime Decarbonisation Centre to be set up
in Singapore.
These actions are aligned with our commitment to addressing
climate change by reducing our own emissions and by working with
partners to reduce emissions in the value chains in which we
operate.
We believe the future is increasingly clear and our strategy,
portfolio, capabilities and approach to social value position us to
play an important role in meeting the twin objectives of an
accelerated energy transition, and continued economic development
and improvement in living standards. We are committed to doing so
sustainably. And we are well-placed to generate great returns and
value for shareholders and to support others to grow and
prosper.
Thank you.
(1) This speech should be read in conjunction with the BHP
Climate Change Report 2020 available at bhp.com which details our
planning cases and portfolio analysis under a 1.5degC Paris-aligned
Scenario.
(2) Based on FY20 copper equivalent production at FY20 average
realised prices.
(3) Represents average copper production from our existing
operations over the next five years, relative to mid-point of FY21
guidance.
(4) FY2020 baseline will be adjusted for any material
acquisitions and divestments based on greenhouse gas emissions at
the time of the transaction. Carbon offsets will be used as
required.
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