Good morning everyone.
I'd like to start by acknowledging the Kaurna peoples of the Adelaide plains, on whose traditional lands we are gathered today.
I pay my respects to their elders, past and present, and their leaders of the future.
I also acknowledge the many Traditional Owners across the state and the nation on whose lands BHP operates each and every day.
We respect their spiritual relationship with Country and extend that respect to all First Nations peoples here with us at this event.
I would also like to thank all of you who are taking the time to attend or participate in this conference at what is a truly exciting time for the copper industry, in particular those of us operating here in South Australia.
As the Asset President of BHP's Copper South Australian business, I am certainly seeing and feeling a great sense of excitement and momentum… from our teams on the ground… from the many people and organisations we work with in SA… and from BHP's global leadership and our investors.
South Australia is home to about 70 per cent of Australia's copper resources.
A world-class copper province in this state – built, as this plenary is themed, on sustainable foundations – is in place today and has the potential to play a part in powering the biggest shift in global energy production and distribution since the second industrial revolution.
That is exactly what I am here to talk about today.
1. The global outlook for copper and what is driving growing demand.
2. How BHP is thinking about our operations here in South Australia.
3. And what is it going to take to realise our shared ambition to create a world-class copper province in this state.
The global outlook for copper
Let's start with the outlook.
Global megatrends are shaping our future.
Population growth, rising living standards, and the energy transition will continue to drive copper demand in the decades to come.
You can see this in conventional demand like power grids, household appliances, electrical machinery and wiring for buildings.
Added to this we have the rise of electric vehicles which take up to four times more copper to build than a normal combustion vehicle.
And the increased penetration of renewables in the power mix – where it takes twice as much copper to generate wind onshore versus gas power.
And, finally, the world of big data, cloud computing and AI – all driving extraordinary demand for both data servers and the power to run and cool them.
At the same time as demand is growing, supply is becoming more challenged.
Copper resources are deeper, more remote, more difficult to find and access, and harder to extract.
There are only so many world-class copper resources remaining in the world.
This places additional importance on ensuring we economically extract as much copper as possible from our current operations.
For BHP, this includes our operations in Chile, where we operate the world's largest copper mine – Escondida – along with the growing Spence copper mine in the country's north.
We're also planning for the future – drilling for our next generation of assets, with our teams searching for new copper prospects in South America, the US, and here in South Australia.
And in May last year, BHP completed the $9.7 billion Australian dollar acquisition of OZ Minerals as we look to grow our business here.
The opportunity for South Australian copper
BHP has a long history in SA.
Our very first connection dates back to the earliest beginnings of BHP, when co-founder Charles Rasp sent samples from the soon-to-be developed Broken Hill mine to Adelaide for testing.
At various times in the 20th century, BHP established and operated a smelter in Port Pirie and the steelworks in Whyalla.
About 20 years ago, BHP acquired Western Mining Corporation, which brought Olympic Dam – one of the world's largest copper resources – into our global portfolio.
And as I mentioned, 12 months ago, BHP acquired the Carrapateena and Prominent Hill mines, that alongside Olympic Dam has created the copper province that we now looking to grow.
Today, as BHP we operate three underground copper mines and a nationally significant smelter and refinery complex in South Australia's far north.
This is the existing province… and it's a significant business.
We are on track to produce between 310 to 340 thousand tonnes of copper this financial year, as well as producing globally significant quantities of co-products, uranium, gold and silver every year.
To date, we have unlocked synergies of more than 50 million dollars US per year from our newly combined operations in SA.
More synergies are coming through as we process concentrate from Prominent Hill and Carrapateena through our central smelter.
BHP's broader workforce in South Australia totals more than 7,000 people. And the nature and shape of our workforce is evolving.
Our underground and surface technical capability is expanding rapidly, and I'm particularly proud that 42.5 per cent of our underground production team at Olympic Dam are female.
These teams are part of our vast underground activity.
Each year, Copper SA operations dig about 70 kilometres of underground development tunnels… that's roughly the distance from here to Murray Bridge
Across our operations, last financial year, our SA business spent about $2.7 billion dollars with suppliers here. This included $280 million with small local suppliers in Roxby Downs and the Upper Spencer Gulf, and $55 million dollars with Indigenous-owned businesses – a figure we are actively increasing.
At Olympic Dam, we have invested $1.8 billion over the past 5 years improving the safety, stability and reliability of our surface processing facilities to provide a firm foundation for growth.
It's a big operation – and it's getting bigger.
Right now, BHP is running one of the largest copper exploration and drilling programs in Australia.
We currently have 13 rigs and hope to construct a new decline as part of our exploration progress at Oak Dam, which we hope could become the fourth mine in our Copper SA operations in the years to come.
We have also had up to 6 rigs at Olympic Dam, where for the past couple of years we have been exploring the area beneath Olympic Dam – OD Deeps – which has exhibited attractive mineralisation at one to two per cent copper grade.
It's one of the amazing things about Olympic Dam – we haven't found the bottom of it yet.
In addition to the significant ongoing investment required to run our existing operations, we are working on a number of growth options.
Within the next two years, BHP will have multiple growth projects across our operations either being studied or actively underway in Copper SA.
These projects represent significant new investment in South Australia and include:
• Progress and completion of the Prominent Hill shaft that will haul ore to surface from 1.3 kilometres deep.
• Transition to a block cave at Carrapateena following the recent commissioning of a second underground crusher this year.
• Further underground development at Olympic Dam.
• Ongoing studies into a smelter / refinery expansion at Olympic Dam.
• A new decline at Oak Dam to complete underground exploration and pave the way for a potential underground mine development.
This program of work will increase the capacity of our mines and strengthen the platform we are setting for future growth options.
Additionally, we are partnering with the South Australian government and other businesses to progress the Northern Water Supply Project to support several new industries in the far north. I'll come back to that project shortly.
In the coming years, we hope to make a final investment decision on an expansion of our existing copper refining facilities at Olympic Dam, to construct a two-stage smelter and associated refinery complex.
This increase of smelting and refining capacity will enable us to process significantly more concentrate from across our Copper SA operations – accounting for variations in grade and copper / sulphur ratios.
This has the potential to result in production of greater than 500 kilotonnes per annum of copper – and more than 700 kilotonnes of copper equivalent per annum when you include the by-products of gold, silver and uranium.
This would constitute one of the most significant investments in copper metal manufacturing infrastructure in Australia for many decades.
Making it happen
The question then becomes… what is it going to take to realise this vision?
There are a few ways to tackle this question, and how we can create conditions that provide certainty for investment and optionality for growth.
There are several elements that play into this, including skills, the mining equipment, technology and services (or METS) sector, permitting and approvals, enabling infrastructure, underlying stability, and technology.
But in one way or another they all boil down to one very important theme: partnership and collaboration.
Investment in skills, training and innovation and a thriving METS sector that builds our collective capability to lead the next generation of technologies and systems will be critically important to SA across a range of sectors.
BHP's support of a new technical college at Port Augusta is a great collaboration between education, government and industry to deliver targeted skills training and guaranteed employment opportunities – in this case to the Upper Spencer Gulf.
This program is building skills through five technical colleges across SA to provide an alternative career pathway for the next generation of skilled workers, including in the skilled technical roles associated with modern mining, innovation and technology.
The Northern Water Supply Project a prime example of enabling infrastructure.
We have seen the power of this sort of investment in BHP with the desalination plant and pipeline that supplies BHP's Escondida copper mine with 100% of its water supply.
Northern Water is a proposed desalination plant and 600-kilometre pipeline servicing the Upper Spencer Gulf and far north regions with the potential to deliver up to 260 megalitres of more sustainable water to a multitude of industries.
BHP is pleased to be joining partners such as Origin, FFI, Amp Energy and the South Australian government on this project, which has the potential to lift South Australia's GDP by $150 billion dollars over its lifetime and create more than 4,000 jobs on average each year in resources, renewables and the energy transition.
And the federal government recently announced a contribution of $65 million to the current feasibility study phase.
As a downstream processor and major manufacturer of refined copper metal with potential for growth… operating in SA, water is a critical resource.
As we grow our current operations and look to progress Oak Dam we need more water. We see the Northern Water project as providing a sustainable and secure water supply, key to enabling growth in refined copper production and the associated jobs and supplier opportunities right here in South Australia.
Underlying stability in fiscal, policy and regulatory settings almost goes without saying.
In mining we must work in the jurisdiction where the resource is located. Unlike many other industries, we can't simply move locations.
As you all know in this industry, efficient permitting and approvals are fundamentally important to getting major projects off the ground.
The South Australian government's recent formation of a Copper Taskforce to streamline assessment processes for multiple projects without reducing standards is a positive development and shows their commitment to sustainable growth.
Technology will be the key to unlocking new resources sustainably.
In my previous role, I led BHP's operational decarbonisation program.
It was great to see the recent announcements that nationally BHP is collaborating with Rio Tinto, Caterpillar and Komatsu to test electrified haul trucks, and with Wabtec and Progress Rail in the development of battery-electric locomotives.
BHP also partners with Neoen to supply about half of Olympic Dam's electricity needs from the Goyder South Wind Farm near Port Augusta.
And we have an electric Epiroc jumbo – a 28-tonne underground drilling rig – that is busy underground at Olympic Dam as I speak.
In recent memory it was impossible to imagine change of this pace in the mining industry, and it goes to show that amazing things can be achieved with a common ambition.
In exploration in SA, we're using 3D seismic survey technology more commonly used in the oil and gas industry to identify high-grade deposits.
3D seismic can obtain deeper, higher resolution ore body and structural information, faster than resource characterisation approaches using drillholes only – this improves both speed and sustainability.
Our Think and Act Differently innovation unit is actively building a global ecosystem of partners dedicated to supporting copper growth across BHP's assets.
You can see the common thread in all of this: partnership and collaboration.
Industry, governments, Traditional Owners, technology providers and communities working together will help bring more copper supply to market to meet global demand more quickly and more sustainably.
There's plenty more I could mention but I will finish with one final thought.
I spoke earlier about shared ambition.
We could also characterise this as shared responsibility.
It is clear that the world will need more copper to achieve a sustainable energy transition.
It is also clear that South Australia has some of the world's finest copper resources – which we are proud to operate and plan to grow.
This presents a significant opportunity - an opportunity for South Australia and the country as we look to help meet the demand for a product needed to decarbonise the world.
As I look around this room, there is representation from a diverse range of industry professionals and technology partners from across the world and your cumulative knowledge and skills represent both today and the future of our industry.
If we can work together in partnership and remain focused on the pursuit of that shared ambition, I am confident we can achieve it.
Thank you.
