BHP says onshore smelting at heart of green metals pivot

afr.com:

BHP boss Mike Henry says Australia will need to be “hyper productive” to compete in future facing metals like copper and nickel, as he invests more in domestic processing and smelting at the heart of BHP’s plan to unlock value from its $9.6 billion consolidation of South Australia’s copper fields.

Mr Henry’s ambitions overlap with the Albanese government’s desire for more domestic processing and manufacturing of minerals, but the BHP chief executive warned that it would not happen without internationally competitive policy settings.

The plan to grow SA copper production by 50 per cent by investing in a “two-stage” smelter process at Olympic Dam came as BHP reported a 37 per cent slump in full-year profit to $US13.4 billion. But its SA copper opportunity comes at a higher cost relative to copper mines elsewhere, and “we need to be hyper-productive in order for these investment opportunities to make sense”.

That was weaker than analysts expected, but still enabled to the miner to pay a final dividend worth US80¢ a share. While 48 per cent lower than last year’s record payout, the $US1.70 a share in annual dividends was the fourth-biggest in BHP’s history.

The iron ore and coal divisions provided 83 per cent of BHP’s earnings before interest and tax, but BHP is hoping to grow its exposure to green metals on the expectation they will enjoy strong demand and high prices as the world electrifies and cuts carbon emissions.

BHP acquired more exposure to Australian copper and nickel through the $9.6 billion purchase of OZ Minerals, and looming investment decisions at two Australian smelters – Olympic Dam’s copper smelter and Kalgoorlie’s nickel smelter – will be influential in determining returns.

BHP has not yet taken a final