BHP is the latest mining giant to announce its lack of interest in a coal-powered future, saying that it had “no appetite for growth” in the resource.
The company said it expects coal to be “phased out, possibly sooner than expected”, and as such has no intention to grow its thermal coal portfolio “regardless of asset efficiency”.
BHP’s strategy briefing, delivered by its CEO Peter Beaven, showed that BHP is shifting its focus to resources that will be needed in a decarbonised economy, namely nickel and copper. Interestingly, it sees limited opportunities for lithium production, saying the market is already well supplied.
“We can with a degree of conviction say that adding options in copper and nickel … are likely to be a sound investment,” Mr Beaven said.
“Demand will grow, and at the same time new supply sources will be hard to discover and permit, and will be more expensive to develop.
“Hydrocarbons demand is expected to be tempered by increased renewables in the energy mix.
“Thermal coal should remain a large market – but over time we expect it to plateau and then decline, as headwinds strengthen.”
BHP noted in the briefing that the external environment is changing rapidly in terms of bio-diversity loss, a heightened degree of policy uncertainty and technological progress in the cost of renewables.
The announcement comes as the Queensland Government is ramping up its approvals process for Adani’s Carmichael Coal Mine after a federal election loss for Labor, which was accused of fence sitting on the project.