BHP brushes off Indonesia threat to WA nickel business, ramps up criticism on ‘same job, same pay’ reforms

BHP has backed Nickel West as it reshapes its overall portfolio to capitalise on “global megatrends”, but chief executive Mike Henry says the government’s controversial “same job, same pay” law reforms will jeopardise its plans.

Speaking at BHP’s annual general meeting in Adelaide on Wednesday, Mr Henry said BHP’s Nickel West operations were well-placed to navigate a weakening nickel price outlook as Indonesian producers rapidly expand their output.

“We have the second largest portfolio of nickel sulphide assets in the world . . . and nickel sulphide will be the most sustainable source of nickel as we decarbonise,” Mr Henry said.

Indonesian nickel is predominately laterite ore, while the nickel at BHP’s West is nickel sulphide. Laterite ore requires a more emission-intensive process than nickel sulphide to be converted into use for renewable energy batteries.

Nickel will remain an important part of BHP’s portfolio, with chairman Ken MacKenzie saying the miner has been deliberately making major changes to its assets portfolio over the past three years.

“It is a belief powered by the global megatrends — population growth, increased urbanisation . . . and the energy transition which are all increasing demand for mineral resources,” Mr MacKenzie said.

Mr MacKenzie pointed to the Jansen potash investment in Canada as a key aspect of these changes.

BHP on Tuesday doubled down on its bullish outlook for potash, approving a $US4.9 billion ($7.7b) investment to expand its Jansen potash project.

Muriate of potash (MoP) — which is the variant of potash Jansen will produce — is a potassium-rich salt used to make plant-based agricultural production more efficient and environmentally-friendly.

BHP’s tick off for stage two of the Jansen project in Canada follows its approval of the $US5.7b stage one component in August 2021 and a pre-stage one investment of $US4.5b.

Another key aspect of the portfolio reshaping BHP outlined was its emerging copper hub in SA.

Mr Henry said its copper ambitions were under threat from the Federal Government’s industrial relations reform.

“The Bill could reduce the value of any potential growth plans for a copper province of BHP assets here in South Australia by up to $US2b,” he said.

“The proposed changes are not about ‘closing loopholes’ but are the most significant and far-reaching changes to Australian workplace relations since WorkChoices.”

BHP last month made a submission to a Senate inquiry into the Bill, arguing the proposed reforms — which include stamping out the overuse of labour hire and criminalising wage theft — would result in a loss of jobs and trainee programs due to significantly higher costs.

In its submission, BHP warned the associated costs were expected to be significantly higher from its previous estimate of $1.3b per year if the IR amendments are passed.

It joined a chorus of other major miners — including its iron ore peer Rio Tinto — to criticise the proposed laws.

Mr MacKenzie on Wednesday also defended the miner’s $2 million donation in support of the Voice to Parliament referendum, after being told by one shareholder it “failed the pub test”.

In response, Mr MacKenzie said there were “clear business reasons” behind BHP’s support for the referendum, which was comfortably defeated last month.

“Indigenous partners, whose relationships are essential to BHP’s continued licence to operate, expected the company to continue its support for constitutional recognition of Australia’s Indigenous peoples and a voice to parliament,” he said.