“In a year marked by the challenges of the global COVID-19 pandemic, social unrest and commodity price volatility, we were safer, more reliable and lower-cost,” Mr Henry said.
After months of signalling it is open to the prospect of exiting thermal coal – the coal used to generate energy – BHP on Tuesday said it was looking at options to exit its thermal coal assets at Mt Arthur in NSW and the Cerrejon project in Colombia, which together account for about 3 per cent of revenue. It also said it was looking to exit its BHP Mitsui Coal joint venture, which mines metallurgical coal in Queensland.
“We are moving to concentrate our coal portfolio on high quality coking coals, with greatest potential upside for quality premiums as steel makers seek to improve blast furnace utilisation and reduce emissions intensity,” Mr Henry said.
Thermal coal is the heaviest-polluting fuel and the focus of rising investor pressure in response to concerns surrounding its contribution to global warming. BHP’s rival Rio Tinto, the world’s second largest miner, has already removed all exposure to thermal coal while Anglo-American earlier this year said it intended to offload its thermal coal assets in the coming years.
BHP’s biggest earner, iron ore, accounts for 65 per cent of its earnings. The price of the commodity has defied repeated predictions it is overdue for a fall and recently surged above $US110 a tonne driven by robust demand from Chinese steel mills and softer output from other exporters such as Brazil’s Vale due to COVID-19 disruptions.
Iron ore is also Australia’s most valuable export, this year becoming the first-ever to crack $100 billion in export value.
Profit from some of BHP’s commodities such as copper, petroleum and coal have been damaged by the impacts of COVID-19.
More to come