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The Australian Strategic Business Forum 2022

Edgar Basto, President Minerals Australia, opening remarks

Edgar Basto, President Minerals Australia, speaks at The Australian Strategic Business Forum.

The Forum brings together local and international political and business leaders to discuss opportunities for the Australian economy.

Opening remarks – Edgar Basto, BHP

Thank you Jackson, and good morning everyone.

I start by acknowledging the traditional custodians of the land on which we meet today, the Wurundjeri people of the Kulin Nation, and acknowledge that across the world, our operations are on or near the lands of First Nations people.

I pay my respects to their Elders, past and present, and extend that respect to First Nations people joining us here today.

I am pleased to have the opportunity to speak with you all, and I thank The Australian for hosting this event, which BHP is proud to support.
It is important to come together in conversation, particularly at a time when Australia has a golden opportunity to set a course for medium to long term growth in the national economy.

In thinking about how we achieve that, there are three things I would like to contribute today:

  • First – with Australia’s strong position to use as a platform, we must work together across government, industry, interest groups and communities to get the settings right and address economic challenges.
  • Second – beyond the economy, business must contribute on matters of broader significance to the nation – for example decarbonisation, the Uluru Statement from the Heart, and workplace equality.
  • And third – there is huge opportunity for our regional and indigenous communities to contribute to, and benefit from, a more diverse, productive and innovative economy.

Australia is well positioned.

We have navigated the challenges of COVID-19 better than most nations.

On the whole, Australia has remained relatively stable and supportive of business activity and investment.

That provides a foundation to refresh and to recharge, as long as we can diversify and modernise our economy, to create greater resilience and new opportunities.

Of course, we still have plenty of work to do.

We risk holding ourselves back if we do not address a number of pressing issues, including rising inflation and skills shortages, uncompetitive fiscal settings, and falling productivity and education levels.

We can overcome these challenges, but only by working together in the spirit of shared interests.

The federal government has talked positively about key areas of Australia’s economy coming together, to find solutions to boost productivity, and drive growth, for all Australians.

We fully support that approach and I look forward to hearing from Treasurer Jim Chalmers later today

It is also important that we think and plan in decades, beyond the electoral cycle or the next annual results.

Unfortunately, we have seen a recent example that is the opposite of this, with the unplanned increase in coal royalties in Queensland.

Queensland now has the highest coal royalty rate in the world, in a state where the cost of doing business is already high.

But what is perhaps most disappointing is that the decision was made without any consultation.

We have been part of Queensland for many decades, employing hundreds of thousands of people, investing billions of dollars, and contributing to regional communities.

When COVID-19 hit, we stepped up to fund regional testing centres and vaccination clinics, to employ more people, support local businesses, and keep the economy moving.

The resources sector, and the many businesses that work with us, will now think twice about investing in Queensland.

The impact won’t be seen immediately, but over time it will affect investment, jobs and business opportunities, especially in Central Queensland.

As many of you in this room would know, about a quarter of Australia’s GDP comes from exports, and nearly two thirds of that comes from the resources sector.

This needs to change.

We need to diversify Australia’s economic base, particularly when you consider that global demand for resources will change in the decades to come.

Demand will significantly increase for commodities like copper – for renewable electricity infrastructure – and nickel – for electric car batteries, and will remain strong for iron ore and metallurgical coal for steelmaking.

Australia has some of the world’s best natural resources, but…

  • We face competition from other regions, and the impact of inflation.
  • The sector faces the peak, and the erosion, of demand from China as its economy matures.
  • And, decarbonisation will impact demand for traditional energy commodities from Australia.

All economies change over time.

The challenge we all face is that we are not seeing new industries emerge to diversify and strengthen the national economy to the extent or at the pace required.

To finish, let me talk about something I am passionate about, creating more opportunities for regional and indigenous communities.

BHP has set goals and is measuring the social value our business provides to all of our stakeholders, our workforce, local communities, Traditional Owners, supply partners, customers, governments, and of course our investors.

In other words, we are measuring the value of our broader contribution to society, not economic value alone.

We do this, because we have a responsibility to contribute at both the national and local levels.

That responsibility means, taking real action on climate change.

We are reducing emissions at our operations, by trialling electric vehicles and moving to renewable power where it makes sense. This creates opportunities for new skills, local businesses and other regional industries.

That responsibility means, supporting the Uluru Statement from the Heart.

This is important to our Traditional Owner partners on whose Country we operate, so it is important to BHP.

BHP first publicly supported the Statement in 2019, and today I reaffirm that support, and our aspiration for a national consensus to achieve the Statement’s ambitions.

That responsibility means, creating a diverse and inclusive workforce.

Today, one third of our workforce in Australia are women, and more than 8% are Indigenous.

That is good progress, but we know we have more to do to make sure our workplace is safe and respectful at all times, and allows our people to perform at their very best.

That responsibility means, providing opportunities for more jobs, training, and local businesses, and helping to create regional industry clusters outside the capital cities.

The BHP FutureFit Academy is one example.

We will train 2500 new apprentices and trainees over five years. To date, we’ve had about 220 students graduate and a further 280 are currently in training.

More than 80% of our students are female, and more than 20% are indigenous. The average age is about 30 years old, and most are from regional communities.

Let me finish with a final thought.

That with long-term thinking, and a willingness to tackle economic challenges, we can create new businesses and industries that add strength and resilience to the national economy and set Australia on the path to ongoing prosperity and growth.

Thank you.