BHP CEO Sees Robust Commodity Outlook Supported by Global Growth -- Commodity Comment
May 18 2021 - 04:51AM
Dow Jones News
BHP Chief Executive Mike Henry forecasts a positive outlook for
world commodity markets, tied to solid global economic growth as
well as technical and fiscal challenges in finding and developing
new mines, according to prepared remarks for an industry
conference. Here are some comments from the speech:
On the commodities outlook:
"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."
On the impact of climate policies:
"The drive to more rapidly decarbonize 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, 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 decarbonization. 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."
On the sustainability of commodity supply:
"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."
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
May 18, 2021 04:36 ET (08:36 GMT)
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