BHP shakes off wet weather and global economic storm

Robust demand from China pushed benchmark iron ore prices to a record high of $US230 a tonne last year. However, iron ore prices have cooled on the back of China’s zero-tolerance approach to COVID-19, which has dampened China’s economy.

Unlike its rival Rio Tinto, which warned on Tuesday that a slowing global economy and slumping confidence in China’s property market will create “further downside risks,” BHP’s quarterly report didn’t mention any concerns about China.

“We expect global macroeconomic uncertainty in the short term to continue to affect supply chains, energy costs, labour markets and equipment and materials availability,” chief executive Mike Henry said.

“BHP remains well positioned, with a portfolio and balance sheet to withstand external challenges and a strategy positioned to benefit from the global megatrends of decarbonisation and electrification.”

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The miner said it has signed a large-scale renewable power purchase agreement with Alinta Energy that will halve greenhouse gas emissions from electricity used in its Western Australian iron ore port facilities by the end of the 2024 calendar year.

The South Flank iron ore ramp-up and the Jansen potash project are tracking well, the group said. Work is underway to bring forward production from the first stage of Jansen and accelerate the mine’s second stage.

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