SUZHOU, Dec 4 (SMM) — In order to achieve a sustainable future, mining giant BHP urges for greater transparency in the pricing mechanisms in the copper market.

“We believe sustainable and ethical practices have extreme importance: Enhance mutual value, shape the value chain, allow us to have a positive impact together and enable our sustainability-focused actions to mulitply value end-to-end across the value chain.”

Speaking at SMM’s 2020 China Nonferrous Metals Industry Conference held in Suzhou, China yesterday evening, Tariq Salaria, VP and Sales Marketing of BHP emphasised the importance of a transparent pricing mechanism.

 “At BHP we favour open and transparent markets, under such models a market clearing price is established reflecting actual supply and demand dynamics which, if allowed to operate unhindered, tends to equilibrium. This mechanism is efficient and a key contributor to sustainable growth. “

BHP is the first mining company to detach from the benchmark mechanism for iron ore. “Distortions in the pricing mechanism result in smelters in the highest cost regions (North America and Chile) continuing to operate, and margins for more efficient operators being squeezed over long periods of time. The advent of more complex concentrates is brushed over with the one price fits all philosophy under the benchmark system, which contributes to super profits flowing to intermediaries, ”he said, “Our message to the industry is simple, if you are genuinely interested in a sustainable future, we need to address the market mechanism as well as our own footprint.”

In his keynote address entitled “Making Copper part of a sustainable future”, Salaria said that eco-labelling has been evolving as a paramount importance, where producers and consumers are eager to trace carbon footprint of the products they consume.

“Decarbonisation and electrification are the main drivers for the future of metal commodities as a stronger commitment toward low carbon economy. To keep pace along with the megatrends such as solar energy and electric vehicles, copper production will have to double over the next 30 years.

“BHP is committed to helping the world reach the ambitions set out in the UN Sustainable Development Goals and the Paris Agreement. Our products are the building blocks of modern life and essential for global economic growth and the energy transition.  We also recognise that use of many of our products and our operations create carbon emissions,” Salaria added.

The miner is also “accelerating efforts towards reducing our operational emissions by at least 30% by financial year 2030,” as this is a mid-term target on the way to meet its goal of being net zero in our operational emissions by 2050.

Specifically, the Escondida and Spence copper mines in Chile will be powered by 100 percent renewable energy by the mid-2020s. When fully operational, these will displace up to 3 million tonnes of carbon dioxide annually compared to the fossil fuel contracts they replace.

“We are also taking action to help enable reduction in Scope 3 emissions. We will support the steel industry to identify pathways and develop technologies by 2030 to reduce emissions intensity by 30%. And we will work with the maritime industry to support an intensity reduction of 40% in BHP-chartered shipping. We expect our actions to catalyse broader emissions reductions throughout the steel and maritime sectors.”