Thank-you to Mr Gao and the China Development Research Foundation for the opportunity to participate in this year's Forum.

BHP produces metals and minerals that are essential to the global economy, necessary for improving the standards of living for a growing global population, and critical to enabling the energy transition.

So, the themes of today's discussion are highly relevant to us.

We're deeply committed to the achievement of carbon neutrality - or the energy transition - at a global level. We know that the opportunities and challenges differ depending on the geographic and economic region… and we are very aware of the importance of companies and nations working together to make this transition succeed.

BHP welcomes the opportunity that this Forum presents to continue to hear about the latest thinking on China's coming opportunities and challenges. We're here to listen and to share our global experience and expertise in engineering, technology and innovation, and in the sustainable mining of essential commodities.

China is very important in the transition to a global clean energy future and is showing leadership on numerous fronts.

In 2023 alone, Chinese investment in emerging clean energy sectors was up 24 per cent year-on-year to 676 billion US dollars.1 And it is now among the top drivers of economic growth in the country.

Navigating our pathway to a successful energy transition may be the defining challenge of our times. To do this well, our development strategies must be innovative, collaborative and regionally specific. I'd like to look at each of those in turn.

First, innovation.

The pursuit of a lower emissions future while at the same time increased the standards of living for a growing global population can only happen if we are effective at harnessing innovation and technology.

China's economic pivot to the 'new three' of solar panels, electric vehicles and lithium-ion batteries is a mark of how important technology is to green development, as well as to the economic opportunity presented by the transition.

At BHP we invest heavily in technology and innovation. With the scale of our very large mining assets, incremental gains in efficiency or production can have an outsized impact on our performance. The more efficient we are, the better we can meet the world's needs for metals and minerals in a timely and low-cost way.

Of course, it is not just about being more efficient, given the scale of growth in demand, we also need to find new, significant metal and mineral deposits.

This is becoming harder. The new deposits that are being found are often times deeper, less rich in the metal we are looking for and smaller than the mines we operate today. This heightens the need for efficiency. Given growing societal expectations and our own values, we need to extract and process these new deposits with less energy, less water, and less disruption than ever before. We do this for example through increasing use of renewable power, more use of desalinated water to reduce draw on natural groundwater, and through measures to protect biodiversity.

One of the ways in which we are harnessing the power of technology is through Artificial Intelligence. For example, AI technology at processing plants within our Escondida copper mine in Chile has helped save more than three gigalitres of water - as well as 118 gigawatt hours of energy - since the 2022 financial year.

Technology is helping us to identify new deposits more reliably as well. The application of machine learning, coupled with human ingenuity, allowed us to recently discover new copper deposits in both Australia and the United States. Even more cutting edge is work on muon tomography. Muons are a type of cosmic radiation that allow us to scan and map underground deposits faster and more accurately than before.

Harnessing the power of innovation and technology to make the world a better place is every bit as important in my sector as it is to the others present in the room today.

The second area of focus I mentioned is collaboration.

The scale and complexity of the world's decarbonisation challenge underscores the need for industry, government and communities to come together and work with common purpose. Integration and collaboration are key.

Collaboration across the value chain opens all of us up to more - and better - ideas. It allows us to share expertise and deliver better outcomes.

BHP continues to work closely with steelmaking customers here in China - like HBIS and China Baowu - as well as others overseas, such as POSCO, TATA and JFE to pursue emissions reduction technologies for steelmaking. BHP's Ventures arm is also investing in breakthrough research in this regard.

In copper, one of our main businesses and a metal that is essential to global decarbonisation, we are working with China Copper and Daye Nonferrous towards a more sustainable and responsible supply chain.

These kinds of collaborative efforts will help ensure we can collectively meet the decarbonisation challenge and in doing so that we can ensure a brighter future for the generations to come.

And finally, I noted the importance of regionally specific planning.

Nations around the world are working towards achieving net zero on different timelines. This makes total sense given different starting points and different domestic economic and political considerations.

In addition to the commitment to achieve net zero, it is clear that many have grasped the economic opportunity at hand as well.

This is certainly the case for BHP. The demand for metals and minerals required to meet the needs of a growing and wealthier population, and accelerated by the energy transition, means the need for more mining, even assuming a lot more recycling. In the decades ahead, the world will need even greater quantities of the commodities we produce, than were required in the decades past. We will need to deliver them even more sustainably and efficiently. Companies that have the financial, technical, and operational capability to meet this increased demand in ever more sustainable ways will be the winners of the future.

There are many pathways to domestic decarbonisation, and no two economies will be the same. China is clear on its own specific path.

Let me talk about steel making as one example. Much has been made of the plans for a faster transition to net zero in European steelmaking than the rest of the world. However, there are a number of region- specific factors that make this more readily achievable and economically attractive in Europe than elsewhere.

With an older steel industry, European blast furnace steel plants, the predominant method for producing new steel, are fast approaching the end of their economic lives. A higher stock of steel in the European economy and lower rate of economic growth, also mean that more scrap steel is available. These two factors enhance the economic attractiveness of building new, state of the art, Electric Arc Furnaces, powered by renewable energy.

But China is different from Europe. Given the remarkable economic growth that China has unlocked in recent decades, China's blast furnace steel facilities are much, much younger. This is also the case in India and Southeast Asia. And steel is still being added to the economy on a net basis, meaning the ratio of scrap available to demand, is much lower than in Europe.

Many Chinese blast furnace mills are state-of-the-art already - far less energy intensive than other blast furnaces on the market. So, given younger, less carbon intensive blast furnaces, and less scrap availability, Chinese steelmakers are understandably looking at continuing to use these assets rather than replacing them earlier than otherwise would be the case. However, they are also showing deep commitment to reducing their carbon intensity and are pursuing opportunities like hydrogen injection, as well as applying a technology like carbon capture, utilisation and storage to abate higher and higher amounts of greenhouse gas emissions. BHP is supporting further investigation of this effort through multiple partnerships.

The path to carbon neutrality - or net zero - requires plans that are innovative, collaborative, and regionally specific.

Getting it right is essential to making the world better. Getting it right can also unlock significant economic opportunity, through investment in new industries and new approaches, as China has so strongly demonstrated in recent years.

China's willingness to open up to the world, and the world's willingness to work with China, is integral to achieving the future we all seek. The relationships we forge at forums like these will underpin our success.

We look forward to continued growth in China as it advances its plans for high quality development and the energy transition.

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BHP Group Limited published this content on 25 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 March 2024 22:47:06 UTC.