Future-proofing African mining: BHP’s strategy

Well, if you look at BHP's history in South Africa, so over a decade ago, around a decade ago, we spun off South32. So in terms of operational activities here, we've got a limited presence. But I think over the last four years, we've been rebuilding that bottom up, really beginning to understand that for this next cycle, Africa is going to be critical. And what happens in Africa, whether South Africa or across the continent, is really going to have a seismic impact on what the supply side looks like to meet the demands of energy transition, AI, electrification, food security, whatever the mega trends that we're driving towards as a company looking to supply society. Africa's going to matter. So for us, it's around exploration, it's supporting the exploration ecosystem through our Explore program. We've got partnerships in Botswana, we've got investments in Tanzania. It's really being able to see what that future looks like. And then more specifically in South Africa, it's the Renaissance that we're seeing in South Africa post election, really understanding what is going to be the next phase of mining growth in South Africa.

Well, I think the optimism that you can see here, the consistency of message in terms of what is required to unlock the potential of Africa. And just to be clear, it's not just Africa. So as a global mining company, we're invested and operating all across the world, whether it's Australia, Canada, Chile, just moved into Argentina, or Africa. It's the same challenges: permitting and regulatory regime, fiscal regime, enabling infrastructure, a healthy exploration industry that is really finding the next deposits, the application of technology, and talent. People, how do you encourage talent into the mining industry to really drive the growth that's going to be needed? With those lists that you've just highlighted.

So as I sort of alluded to earlier, there are two aspects to this. One is for us to understand the potential of Africa, and that is both for our own purposes, as in how does BHP choose to participate in that future by direct investment, by partnerships in the region, really understanding where are the geological domains that are going to drive growth in the key commodities that we're exposed to. And then the second is to understand the competitive dynamic, the political geopolitical dynamic of the games that the different major powers are playing, and what is Africa doing in order to both stand up for itself and choose its own destiny, but also understanding therefore where the growth is going to come from and how that impacts the supply side globally. So those are the two dynamics. One is industrywide really for us to understand as BHP what the dynamic looks like, but then specifically how can BHP play in that space.

Absolutely. So I've been in this industry for over 20 years, first as an investor, well first as a geologist, then as an investor, and then within the mining industry. And I think what is most exciting and stimulating about what I'm seeing this cycle versus say in the 2000s is how much the voice of Africa is being heard and how much more confidence there is in terms of being able to control its own destiny. So as I said, we know what the issues are, whether it's permitting regimes, whether it's enabling infrastructure, whether it's understanding the geology. But the ability of Africa to own that and to drive it domestically rather than relying on the rest of the world, I think is going to make this cycle much more exciting.

So I think for future proofing, one is really understanding the geological endowment. You've got to start with the rocks. And I would say that I'm a geologist, but people forget that. Everyone says okay, we want to be a critical minerals power, but if you actually don't understand your own resource base, if you don't understand the competitiveness of that resource base or the cost of that resource base, then you don't really know how you can play. So one is really understanding the geological endowment of Africa as a continent. And I think specifically for South Africa, you know it's known as a big PGM producer, a big ferrochrome producer, a big manganese producer, but actually what else is there? There needs to be a reassessment of that possibility. So that's the first. The second is around the licensing, permitting, and then taxation regime, which is really just clarity, stability, and consistency. What a perfect system looks like? I don't have the answer, but the predictability of that is going to encourage investment because then you can plan. And then the third one is the enabling infrastructure. And that's what South Africa has really seen over the last few years. It has harnessed the problems of power, rail, water. They're well understood and actions are being taken, and you're beginning to see the benefits of that. But being able to provide reliable affordable power, being able to provide infrastructure access to get your equipment in and raw materials out, and then being able to ultimately deliver the skilled workforce, the intellectual capital, the diversity that's required to drive a healthy mining industry. That's what I mean by enabling infrastructure.

I'd like to see more exploration all over the world. You know, the challenge in the last 20 years is that we're still looking at the same deposits that we've known for the last 100 years. And really, it isn't the geology that's being unlocked, it's the above ground risks. Where you see the barriers to entry are around political changes and social changes. Now the next big disruption when it really comes to supply is what is the resource that we don't know, and then can we use technology to unlock that? Whether it's deeper mines, whether it's metallurgical complexity, whether it's tailings, whether it's water, it's being able to harness the power of technology to then exploit the rocks and really deliver the value.

Well, what I won't do is comment on Anglo or any M&A, but I think for us, it's very much a focus on what we do well. So it's delivering operationally, delivering value to our shareholders. It's around ensuring that we're delivering the growth projects, whether it's our potash mine at Jansen in Saskatchewan in execution at the moment, whether it's our Chilean Escondida growth program, or our Copper South Australia growth program, and delivering on our Australian iron ore business. These are really the areas of focus that will deliver the commodities that the world needs. That physical growth in production is what we need, and we are executing at the moment.