Ken MacKenzie, the recently anointed chairman of BHP, has delivered a speech at the company’s annual general meeting in Melbourne today, while social justice groups gathered outside.
He focused on five key areas for delivering shareholder returns, including safety, portfolio, capital allocation, capability and culture, and social licence to operate.
He expressed regret about three fatalities that had occurred over the last year at BHP mines, one from the Escondida mine in Chile, a second from the Goonyella Riverside mine in Queensland and a third from the Permian Basin in West Texas.
“While our total recordable injury frequency decreased this year, it’s not enough,” said MacKenzie. “These tragedies demonstrate that we must redouble our efforts to protect the health and safety of everyone who works at BHP.”
The chairman said he had been challenged by investors on whether or not safety and productivity were in themselves strategic drivers for the company, and he said that it “absolutely” was.
Centralisation of global truck data for example, had allowed workers to better predict when to replace parts, reducing downtime and projected project costs by 20 per cent.
The chairman also admitted that the company was “pursuing options” to exit its shale acreage in order to maximise value for shareholders. He added that BHP intended to keep capital and exploration expenditures below $US8 billion “over the next few years”.
BHP, he said, had managed to meet its five-year greenhouse emissions target in the 2017 financial year, keeping emissions below 2006 levels while effectively growing operations. The next target is set for 2022.
Despite this point, environmental groups gathered outside the meeting and handed out leaflets to shareholders suggesting that BHP end its membership with the Minerals Council of Australia (MCA), on account of the group’s attempts to stymie climate change proposals. BHP is currently one of the MCA’s biggest contributors.
“The coal industry’s multi-million-dollar lobbying efforts — underwritten by the membership fees paid by BHP, Rio Tinto and other mining companies — have been pivotal in stopping any real government action on climate change,” said Glen Klatovsky, deputy chief executive officer of grassroots climate change advocates 350.org.
“BHP, who have largely left the coal industry, should quit the Minerals Council, and stop bankrolling its climate wrecking efforts.”