Green metals are becoming a major focus for the bosses of the world’s top miners after visits to their biggest customers in China.
BHP Group’s Mike Henry and Rio Tinto Group’s Jakob Stausholm both led company delegations to China this week, two of the highest profile names among a flow of global executives returning to the world’s second-biggest economy to take stock after the end of Covid Zero. A key theme to emerge from their trip is the need to cooperate with Chinese buyers to prepare for the sweeping changes brought by the global energy transition.
BHP signed off on a pilot program for carbon capture technology with major steelmaker HBIS Group. It also agreed to more collaboration with two of China’s biggest copper smelters on tackling the industry’s climate footprint. Talk about low-carbon steelmaking also featured prominently in BHP’s talks with top steel mill China Baowu Steel Group, as well as at Rio’s meeting with Nanjing Iron & Steel United.
There are of course plenty of thorny issues between the miners and their customers that will get less of a public airing, particularly around China’s desire to exert more control on minerals prices. But press releases on discussions to clean up the supply chain, however modest, shouldn’t be dismissed as mere greenwashing.
Top of mind is doubtless China’s intention to cut steel production, in a bid to shrink the amount of carbon spewing from a sector that accounts for 15% of national emissions and which delivers the bulk of BHP and Rio’s earnings. At the same time, the companies have no chance of slashing their so-called Scope 3 emissions — those generated by their customers — and attracting environmentally conscious investors without huge spending on new steelmaking technologies.
In that context, the miners can’t stand by and watch a crucial market slowly evaporate. Instead, they’re making the case that reducing emissions in the world’s biggest steel industry is too complex unless its tackled collaboratively. So, expect more discussions, and press releases, about cooperative ventures. But don’t discount the possibility that real change is also being seeded when top bosses come to visit.