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China Development Forum 2020 - Mike Henry

11 November, 2020

China Development Forum 2020

Mike Henry, CEO

Good evening. Thank you Mr. Wang for the introduction and also Minister Han and Vice Chairman Tang for their insightful speeches on the framework of the 14th Five Year Plan and the targets for 2035.

It is an honour to join this session today. 

The company I lead, BHP, is the world’s largest multi-national diversified resources company, covering oil and gas and a number of minerals and metals commodities, with operations and offices on all six continents.

We are 135 years old and we have been conducting business with China for nearly 130 of those years. The nature of our investments and the importance of resources to the world, means that long-term relationships like this and long-term planning are important to BHP and to our industry.

China has become the most important trade partner for BHP, as our largest market and an increasingly significant supplier of goods and services to BHP. We are proud of the role that our products have played in recent decades in supporting the economic transformation that has been implemented in China. This includes the supply of over 2.5 billion tonnes of iron ore. China’s achievement over the past four decades in improving the economic and social wellbeing of its population, including lifting hundreds of millions of people out of poverty, is unprecedented in human history in terms of its scale and speed. This is a testament both the importance role of long-term planning and strategic thinking, as well as the benefits of openness, trust and collaboration between parties along the supply chain, supported by an environment of global freer trade and mutual respect.

As proud as we are of having made a contribution to China’s success, we also know that this success has been mutual. China’s growth has also greatly benefitted BHP.  

The bonds of respect, cooperation and friendship between BHP and our Chinese customers and suppliers were further strengthened this year as we rose together to overcome the challenges posed by COVID-19. I was particularly struck by how our Chinese partners worked so incredibly hard to support BHP during this period, even when they were facing their own significant COVID challenges early in the calendar year. Likewise, we worked hard to support our Chinese customers and suppliers through the pandemic, including through prioritising further supply of materials to them to enable continuity of operations when their supply chains from others were disrupted.  It is this spirit of common struggle and shared commitment that we believe must underpin the world’s recovery from the pandemic. A shared commitment to building a better, more sustainable world. In the course of human existence, there are certain challenges that transcend borders and politics. COVID was one. And climate change is another. As tough as COVID has been, it pales in comparison to the potentially existential consequences of climate change.

China is demonstrating global leadership in making a clear commitment to becoming net zero and in inviting others to join in collaborating to overcome this challenge. Overcoming climate change is in the common interest of all nations. A global commitment towards a green recovery, enabled by shared action, can achieve a stronger, faster recovery from COVID-19, a cleaner, more sustainable world, and holds the potential to foster a renewed era of global cooperation. 

Given both the strength and speed of its economic recovery from the pandemic, as well as the dynamic nature of it continued economic and social development, China is in a unique position to contribute thought leadership and action to the world’s path back from the pandemic. With this Five Year Plan, you are setting in motion a new round of technological revolution and industrial transformation that will benefit both China and the world. 

Businesses have a critically important role to play in the recovery and in addressing climate change. At BHP, we are taking action. We recognize the importance of partnership and collaboration along our supply chain. Only last week, BHP signed a memorandum of understanding setting out a partnership with the China Baowu Group. This will see us, as leaders in our respective fields, partner to address the challenge of reducing greenhouse gas emissions from the global steel industry. BHP will contribute US$35 million and technical know-how.

The five-year partnership with China Baowu is part of a US$400 million Climate Investment Program, and it is a significant step in BHP’s strategy to collaborate with partners across the entire value chain to help tackle climate change. The partnership will focus on the development of low carbon technologies and pathways to reduce emissions, and support the decarbonisation of the steelmaking process. Our joint intent is to openly share the low carbon and green development knowledge gained through the partnership globally, for the benefit of the world. 

One final note is that the world’s transition to a low carbon economy is going to require resources. Copper for electrification, nickel for batteries, iron ore and metallurgical coal for the steel that will be required for new infrastructure, potash for better agricultural yield. 
In addition to working to decarbonise its own supply chain, one of the most important contributions that BHP can make to the world is ensuring that these commodities are produced and supplied reliably and as efficiently as possible, which can be supported through assuring the relationships and frameworks that underpin free trade, that BHP has long been a champion of.    

We look forward to working with our partners in China to make a contribution to the economic, industrial and environmental aspirations in China’s next five-year plan, and beyond. BHP’s purpose is to bring people and resources together to build a better world. By supporting our customers in China and their action on climate, together we can help to build a better world.