Unlock the White Home Watch e-newsletter without cost
Your information to what the 2024 US election means for Washington and the world
US protectionism underneath president-elect Donald Trump dangers delaying the worldwide shift to inexperienced vitality, based on the chief government of miner BHP.
Trump’s proposed import tariffs and the rising danger of a worldwide commerce warfare current a “key problem for the vitality transition”, Mike Henry instructed the Monetary Occasions.
Australia-based BHP owns the world’s largest copper mine, one of many metals essential to the decarbonisation of vitality methods as a result of it’s wanted for parts in applied sciences starting from electrical energy cables to wind generators and photo voltaic panels.
The geopolitical fallout from US insurance policies would make “capital slower to mobilise to develop the metals and minerals provide that the world wants” to ship the vitality transition, Henry mentioned in an interview in Paris.
Measures resembling commerce tariffs risked tempering “the aggressiveness with which some nations will pursue the vitality transition”, mentioned Henry.
The warning provides to rising fears that Trump’s protectionism poses a risk to the inexperienced transition, exacerbating challenges resembling under-investment in crucial provide chains and the sluggish growth and allowing of fresh vitality initiatives.
Renewable vitality has grown quickly, with capability additions rising by greater than 60 per cent in 2023 from a 12 months earlier, the quickest development ever recorded. However even earlier than Trump’s victory in November, the tempo of development had slowed as a result of greater rates of interest and different hurdles together with strained provide chains.
Trump gained a sweeping electoral victory after campaigning on a pledge to use levies of as much as 60 per cent on imports from China, certainly one of BHP’s largest markets.
“It’s important for the world that the availability of metals and minerals wanted to assist not simply the vitality transition however inhabitants development, urbanisation [and] rising residing requirements is met in as well timed a trend as potential and at lowest potential value,” mentioned Henry.
BHP is constructing its portfolio of commodities round such “future-facing” traits, with a main give attention to copper. “Already, we maintain the world’s largest assets, however the commodity is so enticing we wish to develop additional,” mentioned Henry.
The BHP chief mentioned copper was the principle driver of the corporate’s latest $39bn takeover pursuit of UK rival Anglo American, which might have given the mixed entity management of a tenth of worldwide copper manufacturing.
Though the takeover try failed in Could, the six-month standstill interval mandated by London’s takeover guidelines has now ended, releasing BHP to contemplate a renewed bid.
Henry declined to substantiate plans for one more acquisition try, however burdened that “there’s no M&A transaction that’s a must-do for BHP”. As a substitute, the corporate was centered on “natural and earlier-stage alternatives”, together with its joint acquisition of Argentine copper miner Filo with Canada’s Lundin.
BHP has invested $11bn into the Jansen potash mine in Canada, which can give it management of 10 per cent of the worldwide marketplace for the important thing part in fertiliser by the early 2030s.
Henry mentioned BHP might face up to any fallout of Trump’s protectionist insurance policies on the mining trade. Whereas such measures had been “unhealthy usually for the worldwide financial system and for commodities”, BHP was extra resilient “than most mining firms”, he added.
BHP’s main operations in Australia, Canada and Chile all profit from free commerce agreements with the US, which helped give the corporate a aggressive edge over rivals, Henry mentioned.
He pointed to measures such because the Inflation Discount Act — a subsidy bundle launched underneath outgoing President Joe Biden designed to spice up renewables within the US — as a possible counterweight to among the challenges dealing with the mining sector, providing assist for alternatives created by the vitality transition.
Trump has vowed to tug the plug on these subsidies when he takes workplace in January, in addition to pledging to finish offshore wind and bolster the fossil gasoline trade.
Extra reporting by Rachel Millard in London