Rag Udd, President Minerals Americas,
“Copper producing countries can play a substantial role to underpin the global megatrends of decarbonisation, electrification and renewable energy. This is a unique opportunity.”
What have been the main milestones achieved and challenges faced at BHP’s Chilean operations in 2021 and 2022?
The last two years have been exceptionally important for BHP in the Americas. In this region we currently have two of the commodities that are key pillars of BHP’s future-facing portfolio: copper and potash. We have increased our exposure to these commodities and we have strengthened our growth perspectives. Regarding our Chilean operations, we have celebrated big milestones. For example, last month we inaugurated the new concentrator at Spence, that will allow us to extend the life of the mine for over 50 years and to amplify BHP’s contribution to Chile.
Our progress on desalination continued to progress on a mission that started 15 years ago, and that has allowed us to supply Escondida exclusively with desalinated water and to build a new desalination plant in Mejillones to supply Spence. Our transition to renewable energies is also important to note. We are on track to be 100% supplied by renewable energy sources by the mid-2020s.
Our progress on gender balance is also noteworthy. In 2022, we surpassed the crucial 30% of feminine representation, up from under 17% in 2016. We are on track to achieve our aspiration of reaching a gender balanced workforce by 2025. I want to highlight BHP ́s Operating System (BOS), a system that defines a set of principles, practices and behaviours that make improvement a part of what we do every day at BHP.
COVID-19 has been one of the major challenges. Even though we were able to keep our operations running while keeping our workforce safe, the pandemic is still creating disruptions in our supply chain, while dealing with the effects of labour shortage.
At the World Copper Conference in March 2022 you announced that BHP will invest US$10 billion in Chile under the right conditions. What type of conditions would these be, and where would the investment be directed?
Mining is a long-term activity that requires very specific conditions, and we have been very clear about what those conditions are: fiscal stability, legal certainty and clear pathways to permitting. I’m convinced that the country will provide the conditions for us to materialize the great plans we have for Chile. Under the right conditions, Chile will remain a world leader in copper production.
This investment considers new mining infrastructure, optimizations of our existing assets, non- conventional tailings, eventually building a new concentrator, new leaching processing facilities, developing new mining areas and investments in decarbonisation to reduce Scope 1, ultimately to net zero. The next 5 years will be crucial for executing these plans.
What progress has BHP made in Chile with regard to its water supply and energy use, including the advancement of desalination projects?
In BHP our goals are set in our Climate Transition Action Plan, and water stewardship and clean energies are at its core. In Chile we have been pioneers in desalination: BHP was the first company to build a desalination plant and, over the last 15 years, we have invested US$4 billion in desalination capacity. This has enabled Escondida to only use desalinated water and to stop extracting water from Andean aquifers. We also built a desalination plant in the Mejillones Port to supply desalinated water to the new concentrator at Spence.
Regarding energy use, we have made significant progress transitioning to renewables. We put an end to all fossil fuel-based electricity contracts at Escondida and Spence, and we are aiming for 100% of the renewable energy sources by the mid-2020s.
Can you elaborated on how BHP is eliminating diesel at its operations through the embedment of technology?
Eliminating diesel is probably the biggest challenge today in the mining industry in order to address climate change, and I’m convinced this is a collective effort. At BHP we are developing autonomy programs and pilots in our mines to transition to fully integrated and highly automated assets and value chain. We are always looking to unlock value through transformation, and technology has a highly transformative power.
At the same time, we are collaborating with partners such as Caterpillar or Komatsu to design solutions to electrify our trucks and fleets, and to significantly decrease our diesel consumption. We are searching for disruptive ideas and we are always willing to listen to innovative solutions.
Why do you believe the mining sector is at an inflection point which will shape its future?
The mining sector has the potential to be right at the center of the changes that the world urgently needs. Take copper as an example: copper producer countries can choose to be even bigger players in fuelling the world’s need for copper. And they can also choose to play a substantial role to underpin the global megatrends of decarbonisation, electrification and renewable energy. This is a unique opportunity. So when I say that the industry is at an inflection point, it means that we need to decide wheter or not we are willing to take the right actions at the righ time for saving the planet for future generations.