BHP Warns: Australian Mining Must Adapt to Stay Competitive
Australia’s mining sector faces mounting challenges as it transitions into a new era of fierce global competition and shifting demand, according to BHP Group’s Australia President, Geraldine Slattery.
In a speech delivered Monday in Brisbane, Slattery cautioned that Australia can no longer rely on traditional export markets, as the boom driven by China’s industrialization has entered a slower growth phase.
The Rise of Global Competitors
China’s demand for steel—a key driver of Australian exports—has plateaued, as noted by both BHP and rival Rio Tinto. Meanwhile, the global push for critical minerals like nickel, essential for electric vehicles and the energy transition, is being dominated by nations with lower costs and more favorable royalty regimes.
Nickel, for instance, has seen prices halved since late 2022 due to a surge in supply from Indonesia. Chinese companies, heavily investing in Indonesian processing facilities, are reshaping the market landscape.
“In this shifting world, competitors are aggressively pursuing market share with advanced technology and lower-cost supply chains,” Slattery emphasized.
BHP’s Response to Nickel Market Pressures
Slattery pointed to BHP’s recent decision to temporarily suspend its Western Australia Nickel operations as a direct consequence of these market dynamics.
“The shift in the nickel market tells this story best,” she remarked.
A Call for Policy Action
To maintain its edge, Slattery urged Australian policymakers to focus on long-term competitiveness. She warned that higher royalties and rising wage pressures could drive investment elsewhere, citing Queensland’s recent coal royalty hikes as a cautionary example.
“The sugar hit of revenue won’t leave the state better off in the long run if investment is driven elsewhere,” she said, highlighting the importance of sustainable strategies to keep Australia’s mining industry globally relevant.
As the world transitions to cleaner energy and new industrial dynamics, Australia must adapt or risk being overshadowed by more nimble and cost-efficient rivals.
