25 July 2019
**Check against delivery**
James Palmer, BMA Asset President
Speech given at Bowen Basin Mining Club
Good afternoon - and thank you for that introduction.
First, I want to acknowledge the traditional owners of the land on which we meet today, the Yuibera people.
I pay my respects to their Elders past, present and emerging - and I look forward to our shared future.
I also wish to acknowledge Member for Mackay, the Honorable Julieanne Gilbert and Mackay Mayor Greg Williamson who join us today.
I also thank Julieanne and Greg for their continued support of the resources industry across Mackay and the broader Bowen Basin.
And finally thank you to everyone here today.
This is my first opportunity to speak to this audience, and I believe it has come at a really important time for our industry.
Not least because of the serious need for all of us – everyone in this room – to reset for safety following the events of recent weeks and months.
I will speak to the safety challenges that we are confronting shortly.
But first I want to share a little more about myself, and how I’ve come to lead the BHP Mitsubishi Alliance - or BMA as we’re affectionately known.
I am a proud Queenslander through and through.
I grew up in Childers, a petrol stop that I am sure many of you know from your trips down to Brisbane.
I am the son of two teachers, in English and Science/Maths.
So not surprisingly, I grew up with a strong understanding of the pathways and possibilities created by education and mining!
In fact, the drive to learn has remained with me throughout my career – but more on that a little later.
My first job in the mining industry was at the Gregory Mine as an Engineering Vacation student.
Since then, work has taken me a long way from Childers – both here in Australia - and abroad.
And while my career has taken me far, I will always be a product of regional Queensland.
A regional education. Regional jobs. Regional opportunities.
And, now that I’m back in Queensland, I am focused on my three main passions:
- My family
- Mining - its past, present and future; and
- The Maroons - although I’m still coming to terms with this year’s result.
Today, I want to take this opportunity to share my vision for BMA with all of you.
That includes looking at what’s directly in front of us – our commitment to safety and high performance – and, then in the mid to long-term, I want to share what my vision is for the future.
Before I do that, I hope you can indulge me for a moment as I explain a little bit about who we are.
- We are the world’s largest producer of seaborne metallurgical coal.
- We run a highly integrated system of seven coal mines, connected by third parties, and our own BMA Rail fleet, and we take product to market through Hay Point Coal Terminal – located just down the road from here – which we own and operate, as well as third party ports.
- We are the largest private employer in Central Queensland – engaging a workforce of approximately 10,000 proud, passionate people and the many thousands more, like many of you, who work with us!
- We prioritise sourcing goods and services from the State and regional communities in which we operate - so that others around us also benefit from the work we do.
In FY19 alone – BHP, including both BMA and BMC, spent over 100 million dollars with local businesses through the Local Buying Program.
BMA is also a significant contributor to the prosperity of Queensland as a whole – through employment, contracting and procurement and, of course, through royalties.
To give you a sense of the financial scale of our operations in FY18, the royalties we paid to Queensland amounted to almost 1.5 billion dollars.
So now, as I said earlier, I’m eager to share my view on safety at what is a critical time for our industry.
Ultimately, I hope this vision is shared by everyone in this room and across our sector.
What I want to see is a safer and more inclusive workplace.
- An industry where we all go home safe at the end of the day.
- An industry that’s fatality-free.
But the truth of the matter is, that is not the reality we know in our sector right now.
The statistics are confronting - six fatalities in the past 12 months.
At BMA, there is no way of avoiding the tragic facts over the past few years.
- In 2015 we lost Laurie Donovan
- In 2017 we lost Daniel Springer and
- We lost Allan Houston just over six months ago.
As a leader you never want to receive the call that one of your people has been hurt or killed at work.
And my phone buzzed early on New Year’s morning, while I was back home in Childers, with news of Allan’s fatal accident.
As we all know, no one ever has good news at that time in the morning.
And I can assure you it was an experience that will stay with me forever.
Equally enduring though, is a commitment to do everything possible to ensure this never happens again.
For this reason
- Internally, over the past six months, we have been reviewing and resetting our safety standards and refocusing on our life-saving critical controls.
- At BHP and BMA, we are also an active participant in the current industry-wide safety re-set – working closely with the Palaszczuk government, the Queensland Resources Council, and fellow operators and,
- Next month, as we do annually, we will be participating in the Queensland Mining Industry Health and Safety conference – with a particular focus on reforms that will strengthen the safety culture in the resources sector.
To be candid, we recognise we have more work to do – and we can’t ever be complacent about safety.
Safety never stops – but, at BMA, we are encouraged by the statistics for the last quarter, which tell us that we are improving, by setting standards we can be proud of!
And I am committed to maintaining this momentum.
As we always say to our people, our achievements and performance mean nothing – if we don't all go home safe at the end of the day.
I am going to switch gears now.
Building on my immediate vision for safety, I now want to share my view on performance.
Sector-wide the Queensland mining industry is in a very strong position.
Queensland coal exports set a new state record in June - with over 21 million tonnes of metallurgical and thermal coal exported.
That result was an 11 per cent increase in coal exports on the same month last year.
I believe that, despite the rhetoric globally, these figures underscore how the world’s demand for quality Queensland coal continues to grow.
At the same time we continue to enjoy strong met coal prices.
But – as we all know – we must prepare for the reality that they will level out – not crash – but level out for sure.
For an organisation the size and scale of BMA, it’s imperative that our operations are competitive at every point in the cycle.
To achieve that goal, we need to do three things:
- We must be safe
- We must be stable; and
- We must be sustainable.
If we can nail that trifecta, which I know we can, we will achieve the most from our current portfolio, for us, and those around us.
In simple ‘what’, ‘how’, and ‘why’ terms:
- ‘What’, we must maximise the value of our world-class coal assets
- ‘How’, with best-in-class operational capabilities
- ‘Why’, to create long-term competitive advantage.
And when we achieve that competitive advantage it flows onto the creation of jobs here in Central Queensland, regional contracting and procurement and other business opportunities – something BMA is invested in for generations to come.
In short, it means that others around us also benefit from the work we do.
Now, this leads me to my vision for the future.
To be frank, at BMA, we know we can still generate a lot more value from our existing operations.
In fact we believe the potential is enormous.
We have a transformation agenda underway designed to unlock that potential by delivering the next wave of productivity gains, which will in turn further increase capacity across our operations.
As I said earlier, this is about the mid to long-term. The future.
There are two elements of this transformation agenda that I’d like to talk about.
It may surprise some of you that the first – and most important part of our transformation that I want to highlight – is our people.
Like I’ve mentioned our workforce is made up of over 10,000 proud, passionate people.
We know that what we do today will determine how our workforce and our communities are prepared for the decades ahead.
That’s why we have committed to investing more in our people, to create a stronger foundation to realise the future.
That means more investment in skills building and training.
Spending to build a better culture at BMA, and empowering our people and our partners to help us find better ways of working, and it also means more permanent jobs.
We’ve heard the strong calls from our workforce – and indeed the communities where we operate – to reduce long-term labour hire and create more permanent employment.
BHP’s Operations Services – or OS as it is known – has been developed specifically to help answer those calls and is one of the key ways that we’ll do that.
OS continues to create both permanent roles and operational stability for us.
To date it has seen 400 full time jobs already generated within BMA – and soon we will commence recruitment at other sites which will see another 400 permanent roles created.
We’re proud of that achievement and excited to welcome 800 new people who are supporting the delivery of a safe, stable and sustainable performance.
Importantly, we expect that around half of those people will live in regional communities.
While we’re transitioning to a more permanent workforce at the same time we are also steadfastly focused on preparing our people for the future of work.
According to McKinsey, by 2030 half of the future workforce will need advanced coding and software design skills.
So, in preparation for tomorrow, we know we must build a tech savvy workforce today.
As a business, we are keenly focused on upskilling and reskilling, training and creating a workforce that can make the most of the opportunities in front of us - now and beyond.
For example, we have partnered with the Queensland Resources Council, TAFE and the State Government to deliver training programs to enhance foundational digital skills.
The training will reach hundreds of employees.
At our sites, where the changing nature of work will perhaps be most significant, we have also launched a concerted development program focused on preparing for the roles of the future.
Through this program we are creating the environment and providing people with the tools to be prepared for the change, so everyone can take control, make their own decisions and shape their own future.
This includes learning more about autonomous equipment and operations, transition pathways, training and upskilling requirements.
We are also working hard to prepare for the workforce of tomorrow – partnering on a number of fronts to tackle the STEM skills gap.
In fact, BHP has contributed more than $55 million to STEM programs across Australia.
And that means a lot, to a lot of people – especially here in Central Queensland.
- It means a lot to high school students who are completing Remote Pilot certificates as part of their senior studies, giving them the highest qualifications for Drone Piloting in Australia.
- It also means a lot to regional school principals, who recently toured the State’s best schools for automation and robotics. Now, they are embedding learnings in their own communities – ensuring students here have access to cutting-edge curriculum.
- And, it will mean a lot to vocational students, who will soon have the option to study automation at TAFE – here in Queensland – when, as part of collaborative effort, we replicate a course that has just been created in Western Australia.
And, now to the second - and perhaps far less surprising element of our transformation agenda - I’d like to talk more about Technology.
As you would expect it is one of the major drivers of our transformation.
So what does increased technology and transformation look like at BMA?
What have we done so far, and where are we headed?
In our industry, like so many others, technological change is not new.
But if I am honest, I would also acknowledge that these advances have mostly been incremental in nature.
Over the past 50 years mining has by and large focused on efficiency through increased scale and speed – bigger trucks, faster trucks and learning to operate and maintain them more effectively and safely.
And while this has brought us many rewards, we are convinced that the next phase of development will be driven by technology.
For us, that will mean everything from increased automation through to greater integration across the value chain.
Critically we also see immense potential for it to make our people safer.
And we are already seeing that across our business.
One great example is at Jimblebar Mine in the Pilbara, where BHP operates a fully autonomous haulage fleet.
Significant incidents there involving trucks have decreased by almost 90 per cent.
It’s also vital for us to keep pace with progress we are seeing from our competitors around the world – including here in Queensland.
A few ways that we are doing that, which I’m happy to share with you today, are through the development of our Integrated Remote Operations Centre – or IROC as we know it – and our increasing application of transformative geospatial technology.
Established just over two years ago, the IROC has created an extensive suite of training and upskilling opportunities for our people – many of whom are long-term miners.
Over 50 per cent of the IROC’s mine control team have formerly operated heavy vehicles.
Now, they’re helping drive our entire coal supply chain - from pit to port.
Our IROC has also achieved gender balance from the outset, and above average for Indigenous employment – which is important as we play our part in changing the face of mining.
Elsewhere, we continue to be impressed by the safety and productivity gains delivered through the latest geospatial technology.
Drones are allowing us to gather more information about our sites than ever before.
We can quickly and accurately measure many things, from bund heights, to stockpiles, review compliance to plan and understand where we need to make changes to improve safety or boost productivity.
Most importantly though, drones are also making mining safer.
By deploying technology that removes surveyors from our pits, they are out of harm’s way, and spend less time driving utes and more time driving improvement!
Another example I’m eager to share with you is our study into autonomous haulage.
Through the study, which spans both BMA and BHP’s Iron Ore business, there’s potential to for up to 500 autonomous trucks to be introduced in our open cut operations.
It’s an ambitious target - that would see about a tenfold increase to BHP’s existing fleet of autonomous trucks already operating at Jimblebar today.
But, like I said earlier, the results from Jimblebar – particularly the safety improvements – continue to make a strong case for change.
Before I go any further, I want to reiterate the point I made earlier.
We are deeply committed to preparing our workforce - and the workforce of tomorrow – for the advent of transformational technology, like autonomous haulage.
And maximising opportunities!
Over time as we progress – yes, let’s be transparent – this will likely mean our business has fewer operators physically on the equipment.
But it will mean more controllers, more builders and more technicians.
It will mean less physical and less routine jobs. But it will mean more dynamic, fulfilling careers.
So what does transformation mean for our supply chain?
There’s no doubt that one of the greatest contributions BHP makes to the places where we operate is engaging our suppliers to solve our challenges and in turn, stimulate innovation.
Growing smaller businesses – like yours– with our own, creates shared value for our local communities.
We also know that many of the best ideas come from those who are either more agile than us or further advanced on the journey than we are.
As we accelerate on our transformation journey, we know that we have to embrace new ways of working and new partners to do it with.
Looking, listening and learning beyond our business and industry.
The BHP Local Buying Program is a great example of this contribution in action.
Since its inception seven years ago, BMA and BMC have spent well over 300 million dollars with local businesses through this vital program.
We’ve also made it easier for local businesses to competitively bid, through a streamlined procurement and payment process, including 21-day payment terms.
Our Supply Innovation program is another example.
In a nutshell, it’s an open platform that’s designed to connect our unique mining challenges with suppliers and innovators.
We started this concept at Escondida in South America, it’s now running at Olympic Dam in South Australia and soon we hope to pilot it here in Queensland.
Very excitingly, at Escondida, the initiative recently delivered a new maintenance robot – the first of its kind – created by a local Chilean business.
Not only does the robotic arm keep workers out of what can be a dangerous environment, but it also performs the work much faster.
This a big a win for us – particularly as our people are safer.
It’s also a win for local suppliers – and I look forward to keeping you updated on our plans to replicate its success here in Queensland.
Creating shared value
Finally, as I draw to a close, I want to talk to you about the increasing importance of creating shared value.
Now is a time when our people, our communities and our planet demand more of us.
As the world continues to change – and so too does our industry and indeed BMA itself – we must not lose sight of our position within a larger eco-system.
More to the point, we must not lose sight of the need for others to also benefit from the work we do.
And this is especially relevant in Central Queensland.
- Whether it’s ensuring that everyone goes home safe every day
- Whether it’s creating more permanent employment opportunities
- Whether it’s investing in skills and training to prepare for the future of work, or
- Whether it’s prioritising local contracting and procurement.
All of these things – and much more – are vital factors in ensuring we can and will thrive for the long-term.
And we all have a role to play. Not just large companies like ours. It’s every single person in this room.
We have entered an era that will present significant opportunities for those who create shared value – and significant challenges for those that don’t.
I’ve covered a lot of ground today – so thanks for bearing with me.
Before I go, I’d like to quickly summarise with three key points
Firstly - I hope you, like me, and everyone at BMA, is focused on creating an industry where we all go home safe at the end of the day. There’s no greater priority.
Secondly - We must be competitive at every point in the cycle, and we will achieve this through safe, stable and sustainable performance.
And finally, at BMA, we have the future in our sights, I hope this is something we can all focus on together as a collective, with an emphasis on creating shared value.
I look forward to working with you to seize the opportunities ahead of us.