PERTH (miningweekly.com) – Diversified miner BHP expected the lag effect of inflationary pressures to remain a persistent challenge through the 2023 financial year.
Speaking at the International Mining and Resources Conference (IMARC) in Sydney, BHP group procurement officer James Agar said that there was also no sign that the tight labour market would be easing soon.
Furthermore, Agar noted that the energy crisis in Europe was “profound” and would continue to drive volatility in the energy markets going forward.
“We are, however, seeing some improvement in global supply chain performance. Aggregate supply chain disruption in manufacturing is now significantly lower than in the second half of calendar 2021. And shipping delays and port congestion have eased considerably over the same timeframe.
“So the picture is mixed, labour and energy markets presenting a major challenge, while constraints across broader manufacturing supply chains are easing,” Agar told delegates.
He noted that globally, the near-term macro outlook remained very uncertain and fragile, and that Europe and the UK were almost certainly going to experience recession, and headwinds elsewhere were strong.
“We expect the US economy to slow down; and it’s that economy that tends to drive overall sentiment towards investment in assets. We think China will be a source of stability for commodity demand over the next 12 months, as stimulus policies progressively take effect.
“While stimulus has produced growth in infrastructure and autos, we expect improvement in the housing sector to take a bit longer. The zero-Covid policy remains an overhang that creates additional uncertainty,” Agar said.
“Of course none of this near-term volatility changes the essential role of mining in meeting our future challenges.
“The global megatrends of the electrification of transport, decarbonisation of power and the pursuit of higher living standards are all inherently commodities intensive. Our industry must come together to produce more essential materials, more sustainably than ever before,” he added.