Asset President Jessica Farrell spoke at the International Mining and Resources Conference (IMARC) on the topic of 'delivering essential resources for a decarbonising world':
Good morning everyone. Distinguished guest – ladies and gentlemen.
I am Jess Farrell, the Asset President for Nickel West, a future facing commodity producing asset within BHP.
This is my first time at IMARC and it's a pleasure to be here in Sydney with you all today.
Before I go further, may I take the opportunity to extend my deepest respects to the traditional owners of the land on which we gather today, the Gadigal people of the Eora Nation. I acknowledge their continuing culture, community, and connection to country.
In my capacity as Asset President for Nickel West, may I also pay my respects to all the Traditional Owners on whose lands our nickel operations are located in Western Australia - from our Northern Operations on Tjiwarl country down to our Kwinana refinery upon Gnaala Karla Booja country.
Given the nature of today's discussion, I also acknowledge the profound contribution that First Nations people make to the global advancements made possible through mining.
Before we get started let me point you to the disclaimer.
It is exciting times for us in the Nickel Business; I have just returned from two weeks away visiting our customers in Europe. Customers that many of you would be familiar with as the brands of the cars that you drive or will drive in the future.
This is fairly new for us in the Nickel Business when in 2016 we were only selling less than 10% of our Nickel metal into the Electric Vehicle battery market segment - to where we are today around 85%.
I can tell you that whilst you might think we come from two very different worlds, however the conversations in Automotive and Mining are quite similar with a very strong alignment on purpose – and by far the most important was building a better world…
An increasingly vocal call by the automotive industry is to ensure that vehicle supply chains are addressing important social issues such as carbon footprint, water stewardship and social licence to operate, and industry participants asking questions around our CO2 emissions per tonne of Nickel, our processing methods and our relationships with Traditional Owners, our communities and our employees.
To support this, we are also seeing advancements in government policy and a much greater focus on where the raw materials are supplied from, processed and retained – examples such as the US Inflation Reduction Act, which allows for significant tax credits in the processing of battery cells and the EU Commission Battery Recycling initiative.
These are exciting times … though I have to admit to not being a car enthusiast (I prefer my bike), I did learn a lot about car performance and range… the good news is that Nickel rich chemistries are key to this.
What's even more exciting is that Australian companies are well placed to be a partner of choice, recognising our efforts to address these ethical and environmental concerns, and Australia is a favoured jurisdiction from which to source commodities.
The ambition is to create a supply chain from mine to customers that is built on partnering together to "build a better world" and have traceability and accountability central to sustainability credentials.
Today, I'm looking forward to sharing our journey at BHP and how at Nickel West - together with our people, our suppliers and our communities - we are delivering essential resources for a decarbonising world.
At BHP, we take climate change seriously and we know that we must play our part in addressing it. Our commodities are both essential for sustainable global economic development and to help enable the world to transition to, and thrive in, a low carbon future.
For those that don't know much about Nickel West, I will just give you a quick overview.
Nickel West is an integrated mine-to-market nickel business that has mining and concentrator operations in the Goldfields, smelting operations in Kalgoorlie and a refinery in Kwinana.
BHP has a large nickel sulphide resource, with in-excess of 7.4Mt of nickel in the Agnew-Wiluna Belt. We have a large tenement holding within the Agnew-Wiluna Belt that presents significant exploration opportunity.
Nickel West's current production sold as powder and briquettes, and more recently we started production of nickel sulphate destined directly for the world's EV and battery market segment with Australia's largest nickel sulphate plant producing its first crystals at our Kwinana Refinery in October last year.
Nickel is considered a 'future facing commodity' at BHP - key to the electrification megatrend and a decarbonising world.
Our vertically integrated infrastructure supports high-grade nickel production and there are lots of opportunities to grow across the value chain.
And, as one of the world's leading mining companies – we have a big presence, and strong market intelligence and operating capability.
Over recent years, our business has been through a journey of massive transformation as we looked to diversify and seek out alternative uses for our nickel.
From a commodity supplier in the stainless-steel sector, to becoming one of the world's leading suppliers to the battery metals market segment.
We are one of the first movers into the battery material's sector and we decided to move downstream with the first nickel sulphate plant in Australia.
We have nickel supply agreements with Tesla, MoUs with PPES and Ford, and collaborate closely with many other leading EV battery market participants.
These partnerships explore how together we can make battery supply chains more sustainable and efficient, including opportunities for further alignment on best practice and raising ESG performance transparency.
Sustainable, reliable production of quality nickel will be essential to meeting future demand from automakers who are focused on producing their vehicles in an increasingly sustainable way.
Every day, the world is moving closer to lower greenhouse gas emissions electric-powered transport.
More governments around the world are increasingly committed to the critical minerals industry as the world seeks to decarbonise.
Our State and Commonwealth support is critical, as we are competing internationally with governments that provide multi-billion dollar incentives to support battery value chains.
Last month, the Albanese Government announced that $50.5 million of the federal budget will be allocated to a new national critical minerals strategy to help bolster Australia's low emissions energy production, which we strongly support. In the West, focus on government and industry led task forces and working on the collective infrastructure and government support across our industry will be key to our future success.
There are other incentives that support Australia's opportunity - we have a skilled and experienced workforce with demonstrated capability in the mining and processing methods; HSE standards and regulation are stringent; we also maintain stable grid energy; and there are significant reductions in value chain emissions and carbon footprint by having raw materials and manufacturing in one location.
Recently we welcomed his Excellency Fumio Kishida, Prime Minister of Japan and The Hon Anthony Albanese MP, Prime Minister of Australia to our Kwinana nickel operations where they got to see firsthand how these critical minerals are produced.
As the world increasingly focuses on the threat posed by climate change and the need for decarbonisation, never has this discussion been more relevant.
Electrification of autos is gathering pace and we expect that by 2030, around 60% of all car sales will be electric.
Further… we expect that by 2040, 90% of car sales will be electric. The dominant battery chemistry powering this global fleet is expected to rely on - nickel.
In Australia, Canberra was the first jurisdiction to mandate that all new cars must be electric by 2035, and with significant incentives. A decision we hope other states will replicate and, more importantly, support the infrastructure needed for its success.
This megatrend, combined with a firm demand base from the traditional stainless and class1 applications, means we anticipate demand for nickel in the next 30 years will be 200 to 300 per cent of the demand in the previous 30 years.
In BHP's 1.5-degree Celsius scenario, where decarbonisation and electrification is sharply accelerated, this figure is actually closer to four-fold.
This represents only demand for primary nickel – after accounting for traditional recycling and the rise of a circular economy in the battery supply chain, total nickel use in finished products is likely to be even higher.
As we look to the future, our approach to economic and social value positions us to play an important role in meeting an accelerated energy transition, continued economic development, and improvement in living standards.
It's about running our business in a way that's sustainable, efficient and ethical, delivering long-term, sustainable value, and opportunity … for BHP, our shareholders, our partners, and also the broader community.
Indigenous partnerships is one of our key priority areas – particularly in relation to ensuring that our approach to resource development is compatible with community standards and expectations in relation to cultural heritage.
Our Agreement making in the northern Goldfields - with the Tjiwarl people - is an example of this commitment.
This agreement is designed to ensure that BHP's operations on Tjiwarl country are appropriately informed by the views of the Tjiwarl people. In turn, it provides a platform to support the Tjiwarl community in their pursuit of their own ambitions.
The Tjiwarl and BHP are extremely proud of the number of people involved in BHP's Work Ready Program, with 35 people currently employed at Nickel West's operations in the Goldfields.
We also know that providing thriving communities and supporting businesses in the areas where we operate is critical to maintain long-term partnerships and residential employment for our workforce – for example, good quality childcare in Leinster and Kalgoorlie through our sponsorships.
Our commitment to social value is also reflected in our target and goal for lowering our operational greenhouse gas emissions.
We are not only providing critical resources for a decarbonising world … to thrive in a low carbon economy WE must also decarbonise. It's not just the right thing to do for the planet, it's a requirement of our customers.
I have recently had the opportunity to participate in multiple engagements with the EV battery sector, the message for stronger focus on sustainability, both ethical and environmental was loud and clear.
We know customers purchasing EVs want assurance that the inputs to the manufacturing of these vehicles are also sustainable.
Our nickel operations in Western Australia have one of the lowest production greenhouse gas emissions intensities of benchmarked mines and we are continuing to focus on our pathway to net zero.
In the last 18 months – we have secured arrangements for enough renewable wind and solar energy to enable us, once those renewable projects are operational, to cover 100 per cent of the currently forecast power requirements of three of our major downstream nickel operations, by 2024.
This includes the Merredin Solar Farm and Flat Rocks Wind Farm for our major southern facilities – the Kalgoorlie smelter, the Kwinana refinery and the Kambalda concentrator.
And at our major mining and concentrating operations in the Northern Goldfields – Mt Keith and Leinster – we are working with one of Nickel West's renewable energy partners, TransAlta, to build BHP's first on-site solar farm, and a battery energy storage system, and looking at sites for a potential wind farm.
We aren't only focused on reducing our Scope 2 electricity emissions, but we are also actively pursuing reductions in our Scope 1 emissions from diesel and natural gas consumption and looking at opportunities for carbon removal too.
Electrification of mining fleets is a key decarbonisation requirement for our industry. We have started introducing electric vehicles at a number of our sites around the world, including at Nickel West. And we are progressing studies to better understand how to support a fully electrified mine.
Partnerships and agreements on battery electric options and technologies are also a key focus.
BHP is a founding participant of the Charge On Challenge, a global initiative for technology innovators to develop concepts for large-scale haul truck electrification systems to help the mining sector reduce its consumption of diesel fuel, and significantly cut greenhouse gas emissions.
BHP has also entered into partnership agreements with equipment manufacturers, such as Caterpillar and Komatsu, to explore opportunities to deploy zero-emissions mining trucks at BHP sites. We are excited by the opportunity to explore new technology and innovation that can also benefit the mining industry globally.
And another exciting tech opportunity that Nickel West is paving the way on, is the potential for 'mineral carbonation' of our Mt Keith tailings.
That sort of innovation and work to rapidly decarbonise our operations is really exciting to see in Western Australia.
In late June, we were excited to launch our new 2030 social value goals and scorecard that includes BHP's 2030 goal to create nature positive outcomes through conservation, restoration or regenerative practices – for at least 30 per cent of the land and water we steward, and our goals to co-create plans with communities and Indigenous partners.
It has been great to see our Water Planning and Environment team working together with Tjiwarl on biodiversity and water opportunities and shared learning experiences.
Further, as we look at the opportunities for a more circular economy, we are also working with our partners to identify ways to implement standards for end-to-end raw materials traceability, ethical sourcing and human rights reporting.
This includes exploring ideas like the possibility of recycling battery scrap and used batteries at our nickel operations in the future, for further processing and production of nickel bearing products.
We are genuinely 'thinking big' and taking the next step in creating a more sustainable, transparent industry and one that is working collectively to lift standards and reduce greenhouse gas emissions.
We think this gives us a global advantage in the sustainable production of nickel …. And strengthens our position as a nickel supplier of choice to global customers.
I believe strongly in the criticality of this work – and the business case.
In closing, we recognise we all share the responsibility of building a better future and recognise the role we must play in helping the world achieve its decarbonisation ambitions.
At BHP, we are making significant progress in responsibly delivering essential resources for a decarbonising world.
As you've heard we are deeply committed to not only growing Nickel West to supply more nickel to the market - but doing this sustainably through reducing our own operational emissions and supporting efforts to reduce the carbon footprint of our products.
Importantly, we are committed to unlocking more supply chain opportunities, which can help to de-risk the business and increase resilience … Most importantly though, it is simply the right thing to do.
This is just a small part of our story - one which we are continuing to create in collaboration with others, including many of you in this room.
As a proud Australian and West Australian, I am excited for this future and the role Australia will play not only locally but globally.
Thank you for your time today - and I look forward to speaking on the panel later tonight at the Gala Event.
