As one of the world’s leading mining companies, BHP is focusing on the sustainable supply of essential commodities to support significant reductions in global greenhouse gas (GHG) emissions and address the pressing threat of climate change.
Urgent Need for Decarbonization and Technological Innovation
The Intergovernmental Panel on Climate Change (IPCC) released a landmark report highlighting the urgent need for action to achieve global net-zero GHG emissions. The report emphasizes game-changing technologies such as renewable energy, electrification, and carbon capture as critical to shifting towards low or zero-emission energy sources.
BHP’s Commitment to a Net-Zero Future
BHP has set a target to achieve net-zero operational GHG emissions by 2050. The company has been proactively reducing its carbon footprint for decades, having established its first GHG emission targets in 1996. Fiona Wild, Group Climate & Sustainability Officer at BHP, notes, “Our scenario analysis indicates that the greater the global efforts to decarbonize, the more demand increases for our commodities.“
Supplying Commodities Critical to Decarbonization
BHP’s global operations are strategically focused on the resources needed for both economic development and decarbonization:
- Copper: Essential for renewable energy technology and infrastructure.
- Nickel: Vital for electric vehicle (EV) batteries; BHP anticipates EVs will represent nearly 30% of global vehicle sales by 2035.
- Iron Ore and Metallurgical Coal: Necessary for steel production used in global infrastructure and the energy transition.
- Potash: Key for efficient agriculture, reducing pressure on arable land.
Projected Demand Under a 1.5°C Scenario
Under a scenario limiting global warming to 1.5°C, BHP’s analysis indicates significant increases in commodity demand over the next 30 years compared to the past 30:
| Commodity | Projected Increase |
|---|---|
| Steel | Nearly double |
| Copper | Output must also double |
| Nickel | Production needs to nearly quadruple |
Addressing the Challenges of Emission-Intensive Production
While these commodities are essential for decarbonization, their production can be GHG emission-intensive. To counter this, BHP aims for at least a 30% reduction in operational GHG emissions by FY2030 from FY2020 levels.
Investing in Emission-Reducing Technologies
In July 2019, BHP announced a five-year, $400 million Climate Investment Program to develop technologies that reduce emissions in its operations and across its value chain. The company is also integrating climate metrics into its operating, capital, and portfolio planning.
Collaborating Across the Value Chain
BHP adopts a product stewardship approach, working with shippers and processors to lower emissions throughout the value chain. Goals include:
- 40% emissions-intensity reduction of BHP-chartered shipping by 2030.
- Supporting the steelmaking industry to develop technologies capable of a 30% emissions-intensity reduction in integrated steelmaking by 2030.
Strategic Investments and Partnerships
BHP Ventures, the company’s in-house venture capital arm, invests in emerging technologies with potential to enhance safety, productivity, and sustainability. Investments include:
- KoBold Metals: An exploration firm utilizing advanced AI for resource discovery.
- SensOre: A mining exploration technology company leveraging AI.
- Boston Metal: Innovating molten-oxide electrolysis technology for steelmaking.
- Electra: Developing electrolysis technologies for CO2-free steel production.
Advancing Sustainable Nickel Supply
In July 2022, BHP and Ford Motor signed a Memorandum of Understanding (MOU) for the multi-year supply of nickel. Vandita Pant, BHP’s Chief Commercial Officer, stated, “BHP produces some of the lowest carbon-intensity nickel in the world.” This partnership aligns with automakers’ needs for sustainably produced materials for EV batteries.
Commitment to Renewable Energy and Reduced Emissions
BHP has secured several renewable power purchase agreements (PPAs) to reduce emissions across its operations:
- Nickel West: Three major renewable PPAs supplying up to 50% of electricity needs at the Kwinana Refinery.
- Western Australia Iron Ore: Solar battery hybrid PPA to halve GHG emissions at port operations and an MOU for a new wind farm development.
- Queensland Coal Mines: Renewable PPA to supply half of electricity needs by FY2025.
- Olympic Dam Copper Mine: Two renewable PPAs to reduce operational emissions.
Developing Sustainable Mining Projects
BHP is advancing projects designed with sustainability at their core:
- Jansen Potash Mine: A $5.7 billion investment in Saskatchewan, Canada, aiming for 50% less CO2 emissions and 60% less fresh water usage compared to average potash mines.
- Escondida Copper Mine: Transitioning to 100% renewable electricity supply by the mid-2020s and utilizing desalinated water to preserve Andean aquifers.
Conclusion: A Holistic Approach to Climate Action
While no single solution can fully mitigate climate change, BHP is actively reducing GHG emissions within its operations and across its value chain. By supplying the critical commodities needed for decarbonization and electrification, the company is positioned to meet growing global demand. BHP’s Chief Executive, Mike Henry, asserts, “BHP has some of the best assets in the world to meet that demand,” and anticipates further benefits from an accelerated decarbonization pathway.