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US protectionism underneath president-elect Donald Trump dangers delaying the worldwide shift to inexperienced power, in keeping with the chief government of miner BHP.
Trump’s proposed import tariffs and the rising danger of a worldwide commerce struggle current a “key problem for the power transition”, Mike Henry advised the Monetary Occasions.
Australia-based BHP owns the world’s greatest copper mine, one of many metals essential to the decarbonisation of power techniques as a result of it’s wanted for elements in applied sciences starting from electrical energy cables to wind generators and photo voltaic panels.
The geopolitical fallout from US insurance policies would make “capital slower to mobilise to develop the metals and minerals provide that the world wants” to ship the power transition, Henry mentioned in an interview in Paris.
Measures corresponding to commerce tariffs risked tempering “the aggressiveness with which some nations will pursue the power transition”, mentioned Henry.
The warning provides to rising fears that Trump’s protectionism poses a risk to the inexperienced transition, exacerbating challenges corresponding to under-investment in important provide chains and the gradual improvement and allowing of fresh power initiatives.
Renewable power has grown quickly, with capability additions rising by greater than 60 per cent in 2023 from a yr earlier, the quickest progress ever recorded. However even earlier than Trump’s victory in November, the tempo of progress had slowed because of greater rates of interest and different hurdles together with strained provide chains.
Trump gained a sweeping electoral victory after campaigning on a pledge to use levies of as much as 60 per cent on imports from China, considered one of BHP’s greatest markets.
“It’s important for the world that the availability of metals and minerals wanted to assist not simply the power transition however inhabitants progress, urbanisation [and] rising residing requirements is met in as well timed a style as attainable and at lowest attainable price,” mentioned Henry.
BHP is constructing its portfolio of commodities round such “future-facing” traits, with a main concentrate on copper. “Already, we maintain the world’s largest assets, however the commodity is so engaging we need to develop additional,” mentioned Henry.
The BHP chief mentioned copper was the primary driver of the corporate’s current $39bn takeover pursuit of UK rival Anglo American, which might have given the mixed entity management of a tenth of world copper manufacturing.
Though the takeover try failed in Could, the six-month standstill interval mandated by London’s takeover guidelines has now ended, releasing BHP to think about a renewed bid.
Henry declined to substantiate plans for an additional acquisition try, however harassed that “there’s no M&A transaction that’s a must-do for BHP”. As an alternative, the corporate was targeted on “natural and earlier-stage alternatives”, together with its joint acquisition of Argentine copper miner Filo with Canada’s Lundin.
BHP has invested $11bn into the Jansen potash mine in Canada, which is able to give it management of 10 per cent of the worldwide marketplace for the important thing element in fertiliser by the early 2030s.
Henry mentioned BHP may stand up to any fallout of Trump’s protectionist insurance policies on the mining business. Whereas such measures had been “dangerous usually for the worldwide financial system and for commodities”, BHP was extra resilient “than most mining corporations”, he added.
BHP’s main operations in Australia, Canada and Chile all profit from free commerce agreements with the US, which helped give the corporate a aggressive edge over rivals, Henry mentioned.
He pointed to measures such because the Inflation Discount Act — a subsidy package deal launched underneath outgoing President Joe Biden designed to spice up renewables within the US — as a possible counterweight to among the challenges going through the mining sector, providing assist for alternatives created by the power transition.
Trump has vowed to tug the plug on these subsidies when he takes workplace in January, in addition to pledging to finish offshore wind and bolster the fossil gas business.
Extra reporting by Rachel Millard in London
