Mining executives say energy shocks will slow down climate action progress

A top-tier executive at the world’s largest mining company, BHP Group, says that because countries prioritize energy supply security, ongoing energy supply disruptions will hinder greenhouse-gas emissions reduction efforts.

Speaking in Canberra, Geraldine Slattery, president of BHP’s Australia business, said: “Geopolitical fragmentation has repositioned resources and energy from tradable commodities to tools of national power.” This business segment covers major iron-ore and copper operations. “In many major economies, the security and affordability of resources and energy have moved beyond supply-chain decarbonization and become a top policy focus.”

Slattery said in a speech on Tuesday that this shift “has tangible impacts on investment decisions as well as the speed and pathways of decarbonization.”

Amid sharp volatility in the oil and natural gas markets driven by the Middle East conflict and constraints on tanker shipping through key sea lanes such as the Strait of Hormuz, some countries have implemented fuel export restrictions, while some Asian countries have turned back toward coal-fired power generation. Although there are signs that consumers are increasingly buying electric vehicles, solar systems, and other green technologies to reduce reliance on fossil fuels, the challenges facing major industrial sectors are far more formidable.

BHP, headquartered in Melbourne, has cut operational emissions by more than one-third versus the FY2020 baseline. It is now shifting some of its large mining sites to renewable energy and rolling out electric equipment, including massive electric off-highway haul trucks. Even so, the miner is still struggling to substantially cut the use of diesel vehicles and told investors last year that, due to slow progress in technology development, decarbonization-related spending will slow before the 2030s.

Another major mining giant, Rio Tinto Group, in late December reduced its expected decarbonization spending through before 2030, adjusting it from the previously forecast $5 billion to $6 billion down to $1 billion to $2 billion.

Slattery said: “The technologies on which decarbonization of large industrial sectors depends currently do not have the feasibility for large-scale commercial application, or the supply chain is not yet mature, or there is a lack of mature markets.” “In technical and commercial terms, solutions to diesel substitution for large transport equipment, and the issue of fugitive emissions in coal mine operations, remain difficult to address.”

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Chief Editor: Zhao Fu Li