In Depth: BHP Chief Maps Out Post-Iron Ore Future

BHP, a global mining giant, is transitioning its focus from traditional commodities like iron ore and metallurgical coal to key growth areas such as copper and potash as global steel demand plateaus and the push for green energy intensifies [para. 1][para. 2][para. 3]. CEO Mike Henry detailed this evolving strategy in an interview with Caixin at the China Development Forum, emphasizing a pivot away from oil and gas, and an increased reliance on artificial intelligence (AI) for operational improvements [para. 2][para. 3].

Currently, BHP holds the world’s lowest-cost iron ore operations in Western Australia and is one of the largest producers of metallurgical coal [para. 5]. However, the company’s core growth ambitions are now set on copper and potash. BHP is the world's largest copper producer with annual production between 1.2 million and 1.4 million tons, and it aims to double this output over the next 15 years [para. 6]. For potash, BHP is investing approximately $11 billion in a Canadian project slated to make the company a global leader in potash production by the early 2030s [para. 6].

Copper's critical role in electronics, power infrastructure, and electric vehicles underpins this shift. BHP projects that by 2050, global copper demand could rise by 70%, partly due to increased usage in AI technologies, which may account for 6% to 7% of copper demand [para. 7][para. 8]. Meeting this demand requires about 10 million tons of new copper capacity in the next decade — equivalent to 10 new mines the size of Escondida, the world’s largest copper mine, and an investment of roughly $250 billion [para. 9].

BHP’s commodity strategy is to divest from oil, gas, and thermal coal, optimize iron ore and coking coal, and accelerate growth in copper and potash [para. 13]. Potash is viewed as essential for agricultural yields amid population growth and changing diets, and BHP possesses premier greenfield potash resources in Saskatchewan, Canada [para. 17].

China remains a significant market, maintaining over 1 billion tons of annual iron ore demand for the past six years, though its steel requirements are expected to plateau and then decline as the economy evolves and steel production increasingly uses scrap [para. 18]. Nonetheless, China’s steel export volumes are expected to stabilize between 80 million and 100 million tons annually, higher than previous projections, due in part to demand from China-led international projects [para. 20].

BHP plans to modestly increase its iron ore capacity from around 290 million to 305 million tons per year, focusing on incremental gains through productivity improvements rather than large new projects [para. 22]. On the technology front, BHP is leveraging AI and advanced sensing for exploration, such as using machine learning at Oak Dam in South Australia to discover copper deposits previously overlooked [para. 25][para. 26]. AI is being applied across all operations to boost safety, cut costs, and enhance productivity [para. 27].

In sustainability, BHP aims to cut operational emissions by 30% by 2030—on track primarily through switching to renewable energy. The company collaborates with major steelmakers on decarbonization technologies and partners with Chinese institutions to advance low-emission practices [para. 29][para. 31][para. 32][para. 33].

Looking forward, BHP's China approach is commodity-centric, focusing on partnerships in copper and potash rather than targeting the Chinese market exclusively [para. 36]. The company's overall strategy seeks to align its commodity mix with emerging global megatrends and sustainable growth opportunities [para. 13][para. 36].