On August 27, chief executive Mike Henry announced that BHP (ASX, LON, NYSE: BHP) is finalizing a strategy to cut the company’s operational emissions and diesel use, which will set tangible targets to be reached by 2030. These concrete actions are part of a broader commitment to become carbon-neutral by 2050.
Shareholders were also informed that BHP would announce definite plans towards minimizing the company’s Scope 3 emissions (carbon emissions generated by those who end up using the product.) Some examples of scope 3 activities include transportation of purchased fuels, extraction and production of purchased materials, and use of services and products.
This is a significant move since BHP is the #3 exporter of iron ore, the raw material for steel, and #1 exporter of coking coal used in steelmaking. Making steel involves adding coking coal to iron ore to make the alloy. It’s a highly polluting process that accounts for 9% of global greenhouse emissions.
Some of the projects that will help BHP cut emissions will be supported via a $400M climate investment program, which was announced in 2019. The move follows a sequence of recent steps BHP has taken to become a ‘greener’ company, such as direct air capture and CCS (carbon capture and storage).
Last year, BHP announced four power agreements that involve running its Chilean operations, including the world’s largest copper mine – Escondida, and the Spence plant, entirely on renewable energy. That’s not all; BHP also plans to eliminate the use of water from aquifers in Chile by 2030.
In 2018, the Escondida copper mine in Chile’s Atacama Desert was the #1 producer, with 1.21M tons of copper. It continues to be the world’s most massive copper operation. BHP owns and manages 57.5% of Escondida, while Rio Tinto (30%) and Japan Escondida (12.5%) are joint owners. Escondida copper mine is responsible for approximately 5% of global copper production.
This month, BHP will update its portfolio assessment, taking into consideration the Paris agreement goals, and on October 14, the company will host its Australian annual general meeting.
