The Asia Miner

OCT-DEC 2018

The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region

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Page 17 of 51

the asia miner • volume 15 • issue 4 16 REGIONAL FOCUS: China Major miner, BHP, has analysed the impact of China's Belt and Road Iniঞaঞve (BRI), a network of overseas construcঞon projects, on commodity demand. The company sঞll sees China as offering rich opportuniঞes due to its large scale, ongoing urbanisaঞon and the BRI, potenঞally boosঞng copper use by 1.6 million tonnes, or roughly 7 percent of annual demand. BHP said China's overseas expansion plan covered 115 partners across Eurasia, parts of Africa, Laঞn American and Oceania, up from 68 countries or regions it cited a year ago. According to its Annual Report 2018, understanding the risks and opportuniঞes posed by China's future path is criঞcal to the performance of BHP's porolio. "Based on the results of the study we have carried out, we esঞmate that BRI will involve expenditure of around US$1.3 trillion and potenঞally generate up to 150 million tonnes of incremental steel demand, doubling the growth rate of local steel demand from 2011 numbers", said BHP. BHP is already preparing to meet this projected long-term demand. More immediately, BHP is responding to changes in the dynamics of the China market driven by the country's supply-side reform of its steel industry. With China pushing to complete reforms of its steel mills by 2020 – beginning in late 2015, China began removing 150 million tonnes per annum of capacity, with obsolete and inefficient plants the first to be closed – industry-wide profitability has now improved materially. BHP sees this shi[ having implicaঞons for iron and metallurgical coal demand, with steel mills and copper smelters transiঞoning to more energy efficient and less carbon intensive technology. This will drive demand for higher-quality products. "China's increasing focus on environmental protecঞon and 'ecological civilisaঞon' has prompted increasingly strict emission standards" says BHP. "This will also support the demand for high-quality products that produce fewer emissions." As a major metallurgical coal and iron ore supplier, BHP works with its customers, industry and research insঞtuঞons in China to develop sustainable technologies. BHP believes that China's contribuঞon to the reducঞon of worldwide greenhouse gas emissions "will be criঞcal for the world to limit the increase in global temperatures to two degrees Celsius". To this end, BHP is e collaboraঞng with Peking University on research into carbon capture and storage. China is also forging ahead in posiঞoning itself as a leader in clean energy technology. BHP believes that renewable energy infrastructure will generate greater demand for commodiঞes. "Our industry has a responsibility to be at the forefront of innovaঞon so that we safely, efficiently and sustainably deliver our commodiঞes to the world, throughout any cycle." BHP looks to strengthen its es with China BHP looks to strengthen its ties with China

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