18 May - 8 min read

Bank of America Metals, Mining and Steel Conference Presentation

Bank of America Metals, Mining and Steel Conference Presentation

BHP Group Plc
Registration number 3196209
Registered in England and Wales
Share code: BHP

Issued by:                     BHP Group Plc

Date:                          18 May 2021

To:                            London Stock Exchange
                               JSE Limited

For Release:                   Immediately

Authorised for                 Stefanie Wilkinson
lodgement by:                  Group Company Secretary

          BHP – Bank of America Metals, Mining and Steel Conference Presentation

 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

      -   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:

 The webcast of the presentation will be available at:

 Sponsor: UBS South Africa (Pty) Limited

 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.

Recent 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

The world is continuing to evolve and it is doing so in a way that plays to BHP’s

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

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 1.5°C 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.

Date: 18-05-2021 09:10:00
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