BHP says electric car era is dawning earlier than expectedBy...

BHP says electric car era is dawning earlier than expected

By Nick Toscano and Peter deKruijff

August 3, 2021 —12.25pm

Australia’s largest miner BHP has described 2020 asan “inflection point” for the rapidly approaching electric vehicle revolutionas Elon Musk’s Tesla sold more than half a million battery-powered cars andsales in Europe more than doubled.

The ASX-listed mining giant, whose main commoditiesare iron ore, copper and coal, is seeking to expand its exposure to theminerals that will be increasingly required to power the clean energy age suchas nickel and copper, which are two of the ingredients in lithium-ionbatteries.

Lastmonth, BHP announced a landmark agreement with Tesla to supply nickel from its Nickel West mining, smelting and refining operations in Western Australia.

BHP Nickel West’s outgoing president, Eddy Haegel,said the electric vehicle era was dawning ahead of expectations as worldgovernments unleash “green” post-pandemic stimulus programs targeting transportelectrification and set hard deadlines to phase out internal combustion-enginecars.

Automakers were also increasingly expanding theirelectric vehicle offerings, bringing a range of new battery cars to market in2020, he said.

“In light of this ... by 2030, we expect that aquarter of all sales will be electric vehicles,” Mr Haegel told Australia’sannual mining industry conference, Diggers and Dealers, on Tuesday.

“Compared to two years ago, we have upgraded ourexpectations significantly.”

Asbig miners come under growing pressure from investors and wider society tobetter align their businesses with global efforts to combat climate change, BHPhas been seeking to clean up its assets and its image including selling off itsmines that produce thermal coal – the world’s most carbon-intensive energysource – and lifting its exposure to so-called “future-facing” commoditiesincluding copper and nickel.

Nickel accounts for a very small part of BHP’sportfolio, which is dominated by the steel-making ingredient iron ore, copper,coal and petroleum.

The company has been working to expand its NickelWest unit after reversing earlier plans to sell off the assets, which had beendeemed “non-core” to its portfolio several years ago.

“By 2030, we expect that a quarter of all saleswill be electric vehicles.”

BHPnickel boss Eddy Haegel

Mr Haegel said BHP’s nickel division now sold 85per cent of its volumes to the electric vehicle market rather than thestainless steel industry. He said the miner expected this to be 90 per centwithin a year. “Our transition from a stainless steel supplier, to a supplierof nickel metal to the battery industry, is all but complete,” he said.

RobynDenholm, Tesla’s Australian-born chairwoman, in June declared Tesla was ontrack to spend more than $1 billion a year on Australian-mined lithium, nickeland other metals needed to make batteries and vehicles, but warned the country was missing out on a far more valuable rolein the global supply chain.

While Australia is rich in reserves of battery rawmaterials, large amounts are typically shipped thousands of kilometres away tobe processed and turned into higher-value products such as battery cells inChina and other Asian countries due to an absence of a strong local refiningsector.

Australia lags many countries in the transition tobattery-powered cars (less than 1 per cent of Australia’s new car sales areEVs) but power companies and automakers say falling battery costs mean atipping point is fast-approaching.

Also on Tuesday, BHP and rival miner Rio Tintoannounced they would partner with Komatsu, a Japanese mining equipmentmanufacturer, on efforts to develop zero-emissions haulage trucks.

BHP said it planned to operate one of the firstbatches of zero-emissions trucks in its fleet once they were commerciallyreleased.

“We are excited by the opportunity to work with theKomatsu Greenhouse Gas Alliance to drive new technology and innovation that canbenefit the mining industry globally,” BHP group procurement officer James Agarsaid.