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BHP CEO Sees Robust Commodity Outlook Supported by Global Growth -- Commodity Comment

05/18/2021 | 04:37am EDT

BHP Chief Executive Mike Henry forecasts a positive outlook for world commodity markets, tied to solid global economic growth as well as technical and fiscal challenges in finding and developing new mines, according to prepared remarks for an industry conference. Here are some comments from the speech:

On the commodities outlook:

"The outlook for our commodities is compelling. Government stimulus and pro-growth agendas, which are expected to remain in place for an extended period, are anticipated to lead to robust growth, a lift in inflation and solid demand for mineral resources and oil and gas. This is occurring at a time when our industry's capital discipline and decline in exploration success over a number of years means there are fewer high-quality growth projects in the industry pipeline to meet this demand."

On the impact of climate policies:

"The drive to more rapidly decarbonize the globe may also accelerate demand for many of the products we produce. A growing number of governments are committing to tackling climate change with greater ambition and are cooperating to do so. A transition to a world where warming is limited to no more than 1.5 degrees above pre-industrial levels is positive for BHP and would allow us to create significant value."

"In a Paris-aligned scenario, we expect a more than doubling of the amount of primary copper and a quadrupling of the amount of primary nickel demand over the next 30 years, as was produced over the last 30. Demand for steel will almost double on this basis, and potash will be vital for more efficient agricultural practices. And as the shift to cleaner energy sources occurs, the world will still need oil and gas to power mobility and everyday life on its pathway to decarbonization. The world is going to need more supply of some commodities in order to continue to grow and to make the transition to cleaner energy."

On the sustainability of commodity supply:

"There is though an obvious tension between the world's need for more resources and the need to make the world more sustainable: both for people and for the environment. It is essential that both are achieved. Growing demand must be met ever more sustainably. This requires alignment between resources companies like BHP, investors and society on how best to navigate this tension. Better alignment will enable the transition to be achieved more sustainably, quickly and cost effectively. Conversely, a lack of alignment will result in poorer sustainability outcomes, and slower and more costly progress on the energy transition."

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

(END) Dow Jones Newswires

05-18-21 0436ET

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WTI 0.07% 73.279 Delayed Quote.51.13%
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Financials (USD)
Sales 2021 57 313 M - -
Net income 2021 14 924 M - -
Net Debt 2021 7 479 M - -
P/E ratio 2021 11,7x
Yield 2021 7,27%
Capitalization 168 B 168 B -
EV / Sales 2021 3,07x
EV / Sales 2022 3,08x
Nbr of Employees 31 589
Free-Float 58,2%
Duration : Period :
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Technical analysis trends BHP GROUP
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Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 16
Last Close Price 36,09 $
Average target price 39,20 $
Spread / Average Target 8,60%
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Mike Henry CEO, CFO & Non-Independent Executive Director
John Kenneth Norman MacKenzie Chairman
Rag Udd CTO & VP-Technology Global Transformation
Malcolm William Broomhead Independent Non-Executive Director
Anita Margaret Frew Independent Non-Executive Director
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