Tag Archives: Edgar Basto

BHP to sell stakes in Poitrel and South Walker Creek met coal mines to Stanmore

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BHP has signed a Share Sale and Purchase Agreement to divest its 80% interest in BHP Mitsui Coal (BMC), an operated metallurgical coal joint venture in Queensland, Australia, to Stanmore SMC Holdings Pty Ltd.

Stanmore SMC, a wholly owned subsidiary of Stanmore Resources Limited, has agreed to acquire 100% of the shares in Dampier Coal (Queensland) Pty Ltd from BHP Minerals Pty Ltd, the subsidiary which holds BHP’s interest in BMC, for cash consideration of up to $1.35 billion. The purchase price comprises $1.1 billion cash on completion, $100 million in cash six months after completion and the potential for up to $150 million in a price-linked earnout payable in the 2024 calendar year.

The sale is subject to the satisfaction of certain conditions, including customary competition and regulatory approvals. This includes approval from the Foreign Investment Review Board. Completion is expected to occur in the middle of the 2022 calendar year.

The BMC portfolio includes significant infrastructure including an 8.4 Mt/y coal handling and processing plant (CHPP) at South Walker Creek (pictured), the 9 Mt/y Red Mountain CHPP (fully owned by BMC) in close proximity to the Poitrel operations, two rail loops and train loading facilities, two Marion 8050 draglines, and a fleet of excavators, dozers and haul trucks, Stanmore said.

BHP Group Limited operates BMC as part of an 80:20 joint venture with Mitsui.

BHP intends to continue operating BMC until completion and work closely with Stanmore Resources to ensure a successful transition of ownership. It will provide certain transitional services to Stanmore Resources for a short period of time after completion.

BHP’s President Minerals Australia, Edgar Basto, said: “This transaction is consistent with BHP’s strategy, delivers value for our company and shareholders and provides certainty for BMC’s workforce and the local community. As the world decarbonises, BHP is sharpening its focus on producing higher quality metallurgical coal sought after by global steelmakers to help increase efficiency and lower emissions.

“South Walker Creek and Poitrel are well-run assets that have been an important part of our portfolio for many years and we are grateful for their contribution to BHP.

“Under this agreement, BMC will transition to Stanmore Resources, an ASX-listed company that has established relationships with Traditional Owners and strong engagement with their workforce and local communities. Stanmore Resources share our focus on safety performance and culture and support Australia’s commitments under the Paris Agreement.”

Stanmore Resources’ existing assets in Queensland’s Bowen Basin include the Isaac Plains Mine and processing facilities, the adjoining Isaac Plains East and Isaac Downs mining areas and the Isaac Plains Underground Project.

BHP, meanwhile, said the review process for its New South Wales Energy Coal is progressing, in line with the two-year timeframe announced in August 2020.

BHP and Tesla to collaborate on battery supply chain sustainability

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BHP has agreed to supply Tesla Inc with nickel from its Western Australia operations, in addition to looking at how the two companies can collaborate on ways to make the battery supply chain more sustainable.

The supply agreement will see nickel from BHP’s Nickel West asset in Western Australia, one of the most sustainable and lowest carbon emission nickel producers in the world, BHP says, head to Tesla for use in its electric vehicles and battery storage systems.

BHP Chief Commercial Officer, Vandita Pant, said: “Demand for nickel in batteries is estimated to grow by over 500% over the next decade, in large part to support the world’s rising demand for electric vehicles.

“We are delighted to sign this agreement with Tesla Inc and to collaborate with them on ways to make the battery supply chain more sustainable through our shared focus on technology and innovation.”

This latter collaboration will focus on end-to-end raw material traceability using blockchain; technical exchange for battery raw materials production; and promotion of the importance of sustainability in the resources sector, including identifying partners most aligned with BHP and Tesla Inc’s principles and battery value chains, BHP said.

BHP will also collaborate with Tesla Inc on energy storage solutions to identify opportunities to lower carbon emissions in their respective operations through increased use of renewable energy paired with battery storage, it added.

BHP Minerals Australia President, Edgar Basto, said: “BHP produces some of the lowest carbon intensity nickel in the world, and we are on the pathway to net zero at our operations. Sustainable, reliable production of quality nickel will be essential to meeting demand from sustainable energy producers like Tesla Inc.

“The investments we have made in our assets and our pursuit of commodities like nickel will help support global decarbonisation and position us to generate long-term value for our business.”

BHP to cut Queensland coal operation emissions with CleanCo deal

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BHP has signed an agreement that could help it reduce emissions from electricity use in its Queensland, Australia, coal operations by 50% by 2025.

The renewable power purchasing agreement to meet half of its electricity needs across its Queensland coal mines from low emissions sources, including solar and wind, is with Queensland’s state-owned clean energy generator and retailer CleanCo, which has a target to support 1,000 MW of new renewable energy generation by 2025. The pact will run for five years from January 1, 2021.

“This will effectively displace an estimated 1.7 Mt of CO2e between 2021 and 2025 – equivalent to the annual emissions of around 400,000 combustion engine cars,” the company said.

BHP owns 50% of the BHP Mitsubishi Alliance (Mitsubishi holding the other 50%), which operates several coal mines across Queensland.

The agreement is the first of its kind signed by BHP in Australia and follows the company’s shift to 100% renewables in its Chile operations at Escondida and Spence from the mid-2020s. It will also support the development of new solar and wind farms in Queensland – the Western Downs Green Power Hub, due for completion in late 2022, and Karara Wind Farm, due for completion in early 2023.

BHP’s President Minerals Australia, Edgar Basto, said: “This is an important step forward in BHP’s transition to more sustainable energy use across our portfolio, and a first for our Australian operations. It will diversify our energy supply, help to reduce our energy costs, and reduce BHP’s Australian Scope 2 emissions by 20% from FY2020 levels.”

He added: “This is a prime example of prudent business decisions going hand-in-hand with social value, strengthening our business and benefitting the community.”

BHP Mitsubishi Alliance (BMA), Asset President, James Palmer, said: “This contract will help our operations across Queensland to further increase their sustainability through reducing the greenhouse gas emissions we generate from electricity use by half. It will also support two greenfield renewable projects that, in turn, are expected to generate regional jobs in Queensland.”

Over the five-year agreement, power will be provided via the grid, and predominantly contracted from a combination of solar, wind, hydro and gas generation, according to BHP.

For the first two years, power will be contracted from CleanCo’s low emissions portfolio which includes hydro and gas generation assets. From late 2022, the newly operational solar and wind farms are expected to progressively contribute up to half the electricity requirements, with the remainder supported by CleanCo’s low emissions portfolio. Combined with large-scale generation certificates, this will enable BHP to reduce Scope 2 emissions from its Queensland operations by 50% by 2025, based on the company’s 2020 financial year levels.

The contract will contribute to BHP’s medium-term, science-based target for the reduction of Scope 1 and Scope 2 operational greenhouse gas emissions – due to be announced shortly.

BHP to bolster Australia workforce with new short-term hires

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BHP says it is to hire 1,500 additional people to support its workforce operating across Australia.

The 1,500 jobs will be offered as six-month contracts and cover a range of skills needed by BHP operations in the short term, it said. These jobs will support and bolster its existing workforce during a difficult time when the COVID-19 virus continues to spread.

Yesterday, the company said it was accelerating payment of outstanding invoices and the reduction of payment terms for its small business partners and regional communities in Australia in response to the outbreak.

The roles will include machinery and production operators, truck and ancillary equipment drivers, excavator operators, diesel mechanics boilermakers, trades assistants, electricians, cleaners and warehousing roles across BHP’s coal, iron ore and copper operations in Western Australia, Queensland, New South Wales and South Australia. The jobs will be offered through existing labour hire partners and BHP contracts in each state, it said.

Following the initial six-month contract, BHP will look to offer permanent roles for some of these jobs. BHP will continue to assess this program and may increase the number of jobs available, it added.

BHP Acting Minerals Australia President, Edgar Basto, said supporting the company’s employees, communities and partners, safely, is the highest priority.

“As part of BHP’s social distancing measures we are introducing more small teams with critical skills to work dynamically across different shifts,” he said.

“The government has said that resources industry is vital in Australia’s response to the global pandemic. We are stepping up and providing jobs and contracts. Our suppliers, large and small, play a critical role in supporting our operations. It is a tough time for our communities and the economy. We must look out for each other as we manage through this together.”