BHP chief executive Mike Henry. Image: BHP
BHP chief executive Mike Henry has confirmed in a shareholder Q&A session this week that the company isn’t currently planning to introduce fully autonomous trains.
Henry said it did not pass BHP’s capital allocation process nor present compelling returns to the company financially.
The capital allocation framework is BHP’s guiding principle on making the most out of every dollar invested in maximising productivity and safety.
“We decided not to go down that path right now because of capital allocation,” Henry said.
“We take capital allocation very seriously and when we put some of these automation opportunities through the capital allocation process, some of them make it through because they have good returns. Some of them, the financial case just isn’t there to pursue them.
“That’s where we’ve landed in the case of train automation for now.”
BHP, however, has proceeded with deploying autonomous haulage trucks at the Jimblebar iron ore mine in Western Australia, and BHP Mitsubishi Alliance’s Goonyella Riverside and Daunia coal mines in Queensland.
The mining giant is also introducing automation-ready Komatsu 930E-5 ultra-class haul trucks at its South Flank iron ore project in Western Australia.
The move to new technology would help BHP become net zero in its operational emissions by 2050, according to Henry.
“The strong focus is going to be on structural elimination of emissions in our operations,” he said.
“We’ll focus on how to eliminate diesel use in our equipment in our mining operations.”
Henry also said last month that potash had an upside in a decarbonising world.
“In a decarbonising world, there will be greater pressure on arable land, I think the agricultural industry is also a key contributor to emissions globally. Anything that will contribute to that activity occurring in a more efficient way will be needed. Potash, because of its effect on yield, can be a key contributor to that,” he said.
BHP chair Ken Mackenzie reiterated in the Q&A session that the company was interested in moving the Jansen potash project in Canada forward.
However, he added that decisions at the company board level would still be guided by the capital allocation framework.
“Potash is not really all that well followed by market analysts. It’s a relatively small market. So we actually have to build a lot of capability within BHP on the supply and demand sides and really develop a proprietary view looking forward about the attractiveness of the commodity,” Mackenzie said.
“Given that we like the commodity, its long-term attractiveness and we like our resource position, what’s the best way to create value for shareholders from that position? That’s what (Henry) and his team will be bringing to the board next year.”