BHP chief executive officer Mike Henry is confident in the recovery of the global steel and oil markets after the coronavirus pandemic.
Henry hosted a question and answer session via webcast with BHP’s shareholders yesterday, where he addressed queries about how the company is tracking during the current uncertain times.
With news of oil prices being in the negatives and a lower demand for steel due to companies going into lockdown across the globe, shareholders were eager to know Henry’s thoughts on these vital commodities.
“We have seen a reduction in steel demand as many countries around the world go into lockdown and therefore seen a reduction in underlying economic activity,” Henry said.
“But, in both steel and oil, we are confident that as the world comes out of COVID-19, demand will recover again.
“The fundamentals of global population growth, the billions of people seeking to lift their living standards, of further industrialisation and motor vehicles being purchased, all of these things are going to lead to ongoing demand for oil and steel.”
Henry also assured shareholders that the company is still in good shape but is ready to make the necessary decisions to preserve capital as the pandemic plays out.
“One of BHP’s real strengths is the ability to invest through the cycle and create long-term value,” he said.
“There will be many projects we continue on with, but we’ll also be prudent in the face of the challenges posed by COVID-19, we will look at where it makes sense to defer projects to preserve cash.”
Henry said in the event of requiring a slowdown to projects, the company would assess which projects it can suspend in line with preventing health and safety risks as well, for example, in operations in countries like Chile, that are currently in lockdown.
He also noted questions regarding technology and its role in keeping workers safe while still being productive amidst the pandemic, but stated that sites will not move to autonomous operations on a whim purely because of the pandemic situation.
“Technology has been a very important priority within BHP’s strategy,” Henry said.
“Using technology has allowed us to move quite seamlessly to working remotely, such as using remote operating centres in Perth and Brisbane to conduct mine planning to reduce the people on site to support social distancing.
“BHP has a track record of applying technology to keep people safe and improve productivity, but we will only apply technology where there is a value and safety aspect.”
Henry closed the session noting BHP’s leadership in supporting regional and Indigenous communities throughout the pandemic.
This included BHP’s reduced payment terms to small, local and Indigenous suppliers and postponing face to face engagement in remote Indigenous communities.
“BHP is a resilient company that can weather the tough times, we have more than 100 years of weathering challenging circumstances,” Henry concluded.
“Time and time again, we’ve shown we’re a strong company through the strength of our portfolio, people and values that allows us to see through these times in good shape, this time is no different.”