CIIE Hongqiao International Economic Forum 2021

BHP Billiton in alliance with Conservation International and The Nature Conservancy has announced an agreement to ensure the permanent conservation of 50,000 ha of the Valdivian Coastal Reserve in the Los Rios region, Chile. 

Sustainability is one of the core values contained in the BHP Billiton Charter. As part of the Company’s commitment to sustainable development in the regions where it operates it has committed to a conservation target. The conservation target will see BHP Billiton finance the conservation and ongoing management of areas of high biodiversity and ecosystem value that are of national or international conservation significance.

Complementing this is a requirement for all Businesses to develop dedicated management plans, including controls to prevent, minimise, rehabilitate and offset impacts to biodiversity and the related benefits derived from ecosystems.  As a result, we will improve our environmental performance and contribute to lasting environmental benefits beyond what could be achieved by our operations alone.

The Valdivian Coastal Reserve Project is the second in BHP Billiton's alliance with Conservation International. The core objectives of the alliance are to secure both permanent conservation results and sustainable financing for these globally important protected areas.  This project involves the ongoing protection of 50,000 hectares of temperate rainforest. It also supports the largest ever restoration of native forest in the country, through the removal of 3,500 hectares of non-native eucalypts and the planting of more than 2.5 million native trees.

A conservation easement will also be established, which is a legal mechanism that ensures future uses of the Reserve are focused on its conservation.

“BHP Billiton has set for itself the goal of helping to conserve areas of high ecosystemic value and biodiversity that are of international importance,” said Peter Beaven, President BHP Billiton Copper. “The Valdivian Coastal Reserve in Chile amply meets these criteria.”

Unparalleled riches protected

The Reserve is one of the World Wildlife Fund’s Global 200; 'a set of the Earth's terrestrial, freshwater and marine ecosystems that harbour exceptional biodiversity'. It is also a priority site for the Chilean government and one of 34 biodiversity hotspots identified by Conservation International.

The Reserve is home to outstanding examples of endemic species, including two of the world’s longest living tree species, one of the world's largest living woodpeckers, a small arboreal marsupial (mountain monkey) which is considered a "living fossil", abundant populations of ground-dwelling birds and several highly endangered carnivores. The Reserve is also home to six species protected by Chilean Supreme Decrees, including the endangered Huillín and Chungungo otters and the Pudú (one of the world's smallest species of deer).

Sustainability and empowerment for local communities

As well as protecting native flora and fauna, ensuring the permanent conservation of the Reserve provides financial stability and opportunities for local communities who live and rely upon the region.

With the departure of timber companies, 4,400 hectares of forests are in need of restoration through the elimination of eucalypts and the planting of native trees. The first stage in the re-forestation plan will see The Nature Conservancy and its partners working alongside the newly created Chaihuín Farming and Forest Cooperative to collect wood in accordance with Forest Stewardship Council-certified forestry practices.

In order to enhance productivity in previously overexploited fisheries, marine specialists will work with local communities to develop sustainable fishing practices and better management of marine resources.

Local communities will also benefit from development initiatives to promote entrepreneurship and empowerment. These will create incentives for sustainable and productive projects, including gastronomic tourism, eco-tourism, crafts, forest excursions and more.

Reaffirming a solid relationship

BHP Billiton's donation to the Valdivian Coastal Reserve Project is further evidence of its commitment to the protection of local biodiversity, with the aim of achieving sustainable benefits to the environment and local communities.

It also demonstrates the long-term commitment of BHP Billiton in Chile, generating sustainable value and initiatives for the country and its inhabitants.

Ultimately, as Peter Beaven points out: “It is a source of satisfaction and pride for our company to be able to engage in this cooperation in a country that has given us the privilege of being allowed to manage part of its mineral wealth for more than 20 years.”

Speech - Mike Henry, CEO, BHP at CIIE Hongqiao International Economic Forum 2021

Good morning.

It’s my great pleasure to be part of this year’s Hongqiao International Economic and Trade Forum.

A special thank you to Mr WANG for chairing this session, and also to all the fellow speakers.

My name is Mike Henry and I’m the Chief Executive Officer at BHP, a world-leading multi-national resources company.

We produce minerals and metals commodities such as iron ore, metallurgical coal, copper, nickel, and potash, and we have operations and offices on all six continents.

BHP was founded in 1885, and we’ve been building relationships with our customers and partners in China for nearly 130 years.

Today, Chinese companies are our most important trade partners and some of the most important suppliers of goods and services to BHP. Overall, China is our largest single market.

As a responsible company and one that’s focused on the needs of its customers and the world, we must understand how green development and decarbonisation will shape future global trade.

The outlook for China’s ongoing development is positive. It is clear China is central to the world’s ability to meet its climate ambitions, and the country’s continuing growth will come with a falling environmental footprint.

Electrification will accelerate, the power mix will shift from one dominated by coal to low-carbon sources.

Building, transportation and industry sectors will also need to transform on the path to lower emissions.

These are very important developments. BHP is working with Chinese customers and suppliers to play a role in supporting this direction.

We’re also well positioned to supply, in a sustainable way, the commodities required for ongoing growth and decarbonisation for decades to come.

Under BHP’s Paris Agreement-aligned scenario, where the increase in global temperatures would be limited to 1.5 degrees Celsius above pre-industrial levels, the world would need more than double the amount of copper and nearly quadruple the amount of nickel over the next 30 years, as was produced during the last 30 years.

Iron ore and metallurgical coal will also be needed to forge the steel to build new urban infrastructure and renewable energy systems, and potash will be vital for more efficient and environmentally sustainable farming.

All of these commodities are essential to support decarbonisation - in China and around the world - and BHP is shaping its portfolio to meet these growing needs.

However, green development affects trade in ways beyond simply product demand.

Companies must work within the whole ecosystem to help build resilience and sustainability in their value chains, and foster multi-faceted and impactful partnerships driven by areas of common strategic interest.

Our value chain approach includes partnerships to reduce Scope 3 emissions with our customers, joint research projects to help future-proof their business and ours, and strategic sector alliances where we can share our learning and expertise.

For example…

We are supporting the steel industry to identify pathways and develop technologies to reduce emissions intensity in the steel making process.

BHP has partnered with steel makers China Baowu and HBIS to invest up to $50 million collectively in low emission technologies.

We plan to make this technology available to the broader market to support the reduction of emissions from the steel making industry.

We’re also working with Automotive Data of China Company to better understand what shapes the outlook for the fast growing electric vehicle market, including how improved battery efficiency and new products impact demand. We expect these research findings to help drive electrification in the Chinese transport sector.

In September, BHP partnered with the Centre for International Knowledge Development to research China’s Strategy and Global Outlook on the Carbon Emission Peak and Carbon Neutrality. This work brings together global companies, Chinese SOEs and private firms to identify effective pathways for China’s overall energy transition and emissions reduction in the building, transportation and industry sectors.

We also support the digitalisation of commodity trading, including eDocumentation and blockchain trade.

In August, we piloted the first blockchain trade in copper concentrates with China Minmetals. Blockchain is being used to improve efficiency and security in the settlement process, and bring greater transparency over shipped product quality by digitalising the certification process.

In the future, this technology could also be used for product based sustainability reporting between customers and suppliers.

These important partnerships with Chinese customers, enterprises and researchers are part of the shared strategic shift to make our value chains greener, and international trade more sustainable.

At BHP, we consider our contribution to this challenge in three key dimensions - many of which I have touched on today:

Firstly, through responsible sourcing; this includes the integration of sustainability considerations into procurement and logistics in our inbound and outbound supply chains, including shipping.

Secondly, process stewardship, where we strive to meet the responsible sourcing expectations of the market in how we extract our products at our operations.

And thirdly, product stewardship, where we work to support the sustainability performance of our customers.

We’re committed to partnering with customers and supply partners with similar approaches and shared values in working to achieve greenhouse gas emissions reductions in line with the goals of the Paris Agreement.

In essence, the question quickly becomes not how green development and decarbonisation impacts trade, but how can global organisations maximise the impact of green development on trade at every opportunity?

At BHP, we are eager to continue to work with our customers and partners in China to help find the solutions to this important global challenge.

Today, trade and trading relationships cannot be viewed through a single transactional lens. All emitters, resource companies, customers, suppliers and consumers must play their part. This is essential. It’s a key competitive advantage for business and it will become increasingly important for us to address climate change together.

Thank you.