BHP Chief Executive Officer Andrew Mackenzie, in an ABC television interview recently suggested that despite the recent changes in China’s consumption of Australia’s natural resources and increased global competition – some of Australia’s best days in mining are still ahead of us.
When Mr. Mackenzie was asked the question “Do you think that Australia is transitioning out of the resources boom?” he replied, “Not at all. I think maybe some of the best days are ahead of it. I believe, obviously as you’re hinting, that the resources industry has been pivotal to Australia, but as we go forward, demand continues to increase and everything is for Australia to play for.”
- China is going through its transition as well. It is slowly moving from being entirely investment driven to being more consumption driven
- China is re-balancing its economy
- I’d also say that for many of the commodities that Australia’s resources industry produces, we’re looking at the possibility of an increase in demand of about 75 per cent in the next 15 years
- China’s growth will be in it’s demand for energy to grow their infrastructure
- Potash, BHP’s mining activities will be in demand owing to the food requirements of the world
- 70 per cent of BHP’s profits come from Australian mining operations
- BHP are Australia’s biggest taxpayer at $9 billion
- BHP supplies 40 per cent of China’s iron ore
- BHP also supplies India and Korea with about 40% of their coal
- BHP supplies around 20 per cent of Japan’s LNG
- BHP are looking to the Australian government to promote productivity, including industrial relations and make the country more competitive in a global market
- Workers want to do their job better, have security and long term employment
- There has to be a focus for other countries to look to Australian mining companies to produce a low-cost solution for their growing energy needs
- We are seeing a slight slowing of growth and changes in the pattern of growth, from investment to productivity
- There is a huge amount of investment still to come, although it is focused on making more efficiencies and increase sustainability in its current mining operations
- BHP believes increased productivity preserves mining jobs, by producing more for a given cost by creating more high performing mines to compete globally
- According to Mr. Mackenzie there are hundreds of years of iron ore mining in the Pilbara as well as coal mining in Queensland and New South Wales, still to come
The ABC aired the interview aired on 7.30 on Thursday 8 August, 2013.
You can watch the interview with BHP’s CEO Andrew Mackenzie on the ABC website.