What was the rationale for BHP moving its exploration headquarters for nickel and copper to Toronto?

BHP had an expansive global spread, but when metals prices collapsed at the time of the Great Financial Crisis, we shrank as an exploration unit back to what was essentially a South American copper exploration company. This profile would only get us so far with respect to replenishing BHP’s asset base, so Mike was keen to create a more ambitious growth lever. That is when the decision was taken to move the Metals Exploration team to Toronto and to co-locate it with our Business Development group. We chose Toronto because it is a center of excellence for talent and mining companies. There is a critical mass of mining companies in the city, and being in Toronto positions us closer to key business partners, news and deal flow, and capital markets activity – all of which supports our growth conversation.

Canada is a fantastic place to go for nickel and copper. We are already working with Canadian partners and looking to acquire and discover new nickel projects across the country.

How does BHP go about defining the right balance of commodities to pursue to fuel its growth strategy?

We are constantly challenging our beliefs around what is the right basket of commodities. At this point in time, for both nickel and copper the consensus is that they are going to be needed in a big way for the world to decarbonize and electrify its economy. Our current mix focuses on copper, nickel, potash and iron ore, all commodities that can help the world with regards to growth and better managing environmental challenges. BHP is very much geared toward the long term. We are looking at developing the next generation of deposits that we may not see the fruits of for another 20-50 years. What is absolutely certain is in that timeframe, we will be in a greener world, and copper and nickel play very strongly into that.

What makes Canada an advantageous location to explore and develop nickel and copper mines?

Canada sits right at the heart of the opportunity for both copper and nickel. It is a country with a proven track record and a strong pedigree of exploration and production in those two commodities. Where the opportunity and the big challenge sits is going deeper, which I refer to as the “Next 400”. We have had a good crack at the first 400 meters of the earth’s crust and as a result often think that exploration is mature. However, we have a lot of uncertainty beyond that. It is a challenge because we can’t see it, and it requires new technologies. This is a new greenfield search space for us, and we believe there is a tremendous amount of potential in Canada. It also plays strongly into the likelihood that the next generation of mines will be underground. That means they are going to have much smaller footprints, and less impact on other land users and stakeholders.

How is BHP reimaging mining to improve the economics associated with deposits that are more mature or technically challenging?

It has always been about grade, and likely will always be about grade. We must get smarter at identifying higher grade deposits earlier in the lifecycle of an exploration program. We also need to reimagine how we build new mines once discovered. In this regard, we are searching for ways to further optimise our capital spend. The industry has a tendency to think everything needs to be large scale – to look like our Escondida mine – but we need to think in a more agile sense. This means exploring new ideas like modular mining, where one can scale projects rapidly and cheaply, and mine to value rather than scale.

If we look at the asset base of mineral inventory, it typically takes approximately 20 years from discovery to operating a base metals mine. We want to make that 10 years, because if it takes 20 years, it will not have the same impact in delivering a decarbonized and electrified world. This is how we need to reimagine mining in the 21^stCentury.