BHP, the world’s biggest miner, said Wednesday the outlook for coal was “challenged” and there was “no appetite for growth” as it sought to capitalize on opportunities in electric transport and renewables. The miner outlined its long-term strategy months after other major global commodities giants — including Glencore and Rio Tinto — said they were limiting or moving away from coal production.
“Thermal coal should remain a large market — but over time we expect it to plateau and then decline as headwinds strengthen,” BHP’s chief financial officer Peter Beaven said in a briefing. In a slide presentation, Beaven highlighted BHP’s outlook that energy coal assets were challenged and could be phased out — potentially sooner than expected — as there was “no appetite for growth” in energy coal regardless of asset attractiveness.
The Anglo-Australian firm said two key trends — the electrification of transport and the move away from fossil-fuel based power plants — meant there would be demand for its nickel, copper and oil assets. “We have options in copper and oil, but we need more. And we are interested in adding more nickel sulfide resource to our portfolio. So we should continue to add exploration options in these areas,” he added.
BHP added that potash, used for making fertilizer, was a “valuable growth option” as it contributed to sustainable land use and food security. Efforts by global miners to transition to a lower-carbon economy comes amid heated debate during resource-rich Australia’s recent elections over government approval for a major India-backed coal mine.