BHP chair Ken Mackenzie says elections, protectionism making world volatile, as green steel remains elusive

BHP’s long-serving chairman Ken Mackenzie has told an annual meeting the global mining giant can weather the woes of inflation, a slowing Chinese economy and erratic commodity prices — but turning steel green will be a tough task.

The Big Australian held its annual general meeting in Brisbane on Wednesday, less than a week after it finalised a $45 billion settlement with Brazilian authorities over a dam disaster that caused a giant mudslide killing 19 people back in 2015.

Mr Mackenzie, who has been chair of BHP since 2017, assured the miner was “committed” to supporting rehabilitation funds “to do what’s right for the people, communities and environment affected.”

BHP’s progress towards slashing at least 30 per cent of its scope 1 and 2 emissions before 2030, and its pathway to start producing the as yet elusive green steel, also came under fire.

The chair affirmed BHP would meet the target in the next six years, and had made good progress on its scope 2 emissions, or indirect emissions, by buying electricity powered by gas or renewables.

“Target for us means commitment, and we’re tracking very well against that target,” he said, estimating it would cost the company about $US4 billion before now and 2030 to trim its greenhouse gas emissions.

But he conceded the company had been “challenged” in doing so while trying to scaling up commodity output at the same time.

Removing emissions from the hugely energy intensive steel making process — counted under scope three as they are out of BHP’s control but a huge contributor to its carbon footprint — was also proving tough.

“Decarbonising the steel sector is a challenging task. There are currently no near zero emissions technologies for iron ore based steel making ready for widespread commercial adoption,” Mr Mackenzie said.

“We have developed our steel making decarbonisation project . . . but the technology required to reduce emissions across all these pathways is still developing and at different maturity levels, with some only at early pilot stage.

“We haven’t identified the right pathway yet on steel decarbonisation.”

On the miner’s operations, he said the company was positioning itself for a world that had become “increasingly volatile”.

“Over the past year, the world has experienced ongoing humanitarian crises in the Middle East, Ukraine and Sudan, threats to the continued expansion of global trade by a new wave of protectionism, and a range of consequential elections across the globe that are reshaping the policy landscape,” he said.

“In our operations, we are also seeing the lagging effects of inflation, uneven recovery in China and supply side surpluses for some commodities which is contributing to price volatility.

“In our view, the best way to create enduring value for shareholders amid all this turbulence is to hold a mix of high quality, resilient assets, and to run them exceptionally well.”

According to AAP, some 500 protesters have descended on the annual meeting to decry the company’s use of labour hire and climate action credentials.