BHP chief executive Mike Henry has expressed his confidence in the company’s employees to deliver “safer, leaner and high performing” operations in all parts of the business.
Speaking at a Bank of America conference on Tuesday, Henry said that a much higher proportion of BHP’s workforce would be BHP employees.
This is expected to drive BHP into becoming a more nimble and commercially minded company.
“I want us to be even safer, leaner and high performing, with more options for the future,” Henry said.
“The times demand it, and we have certainly seen that in recent months.”
Henry said BHP would stick with the company’s capital allocation framework, a spending model that helps BHP make the highest return out of every dollar even during the COVID-19 times.
“We will of course make decisions about what level of capital and exploration expenditure is warranted in the coming year given market circumstances,” the chief executive said.
“We will look to defer some, where that makes sense for value or to preserve cash. We’ll have further detail on this at the full year.”
BHP already expected its 2021 financial year capital spend to be lower than the around $US8 billion ($12.4 billion) it previously guided to, Henry said.
The mining giant is on track to unlock more than half a billion dollars in overhead savings by 2021 and has also restructured its technology team to drive lower cost.
“We anticipate that global steel and primary energy demand will both grow slightly faster than population growth for decades to come, while copper, nickel and potash will do a little better than that,” Henry said.
Chinese pig-iron production could also grow slightly this year should it not hit a second COVID-19 wave, contrary to a double-digit decline that could be felt by the rest of the world, he added.
“Other than in China where a V shaped recovery appears to be underway, we think the recovery will be more protracted elsewhere,” Henry said.
“By the end of the 2021 calendar year, our base case has the global economy rougly 4 pr cent smaller than it would have been if COVID-19 had not happened.”
Henry acknowledged BHP’s need for more options in future-facing commodities, saying the company would get more out of what it had.
“We will also harness people and technology to create and secure more options for the future through exploration, with a focus specifically on future-facing commodities,” he said.
“I think this is a winning formula.”