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Speaker 1: Welcome to Fear and Greed Q and A, where we

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Speaker 1: ask and answer questions about business, investing, economics, politics and more.

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Speaker 1: I'm Michael Thompson, and today, can BHP maintain its dominance

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Speaker 1: as its focus shifts from iron ore to copper. Yesterday,

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Speaker 1: Australia's second largest company announced a twenty six percent drop

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Speaker 1: in underlying profit, with iron ore prices under pressure from

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Speaker 1: slowing demand in China. It is BHP's weakest performance in

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Speaker 1: five years, but the company is still optimistic, particularly about

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Speaker 1: its growing number of copper assets and also its shift

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Speaker 1: into the fertilizer potash. Vandita Pant is the chief financial

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Speaker 1: officer of BHP. She spoke with Juliet Sally at Osby's,

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Speaker 1: who asked her what happens if global growth slows more

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Speaker 1: than BHP is forecasting.

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Speaker 2: Let me talk about commodity by commodity. In iron ore,

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Speaker 2: we are the lowest cost producer in the world, with

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Speaker 2: C one cost of only seventeen dollars fifty six cents,

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Speaker 2: which means that we produce seven dollars more cash flow

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Speaker 2: per ton compared to our nearest competitor, which gives us

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Speaker 2: a huge resilience in the business where the business will

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Speaker 2: continue to be a fantastic business. In a copper again,

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Speaker 2: our copper projects assets in Chile. In South Australia, our

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Speaker 2: low cost producers Escondida had unit cost lower by eighteen

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Speaker 2: percent year on year, which shows you the kind of

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Speaker 2: cost discipline is happening along with production volume being increased. Overall,

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Speaker 2: across all our major assets, unit costs last year we're

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Speaker 2: down four point seven percent in spite of inflation of

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Speaker 2: around three percent in the jurisdictions of our operations.

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Speaker 3: When you discuss cost discipline, does that mean potential job

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Speaker 3: cuts could be coming.

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Speaker 2: Labor productivity is an important lever that we have, but

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Speaker 2: it also means getting most of our most out of

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Speaker 2: our resources. Our cost discipline means all our workforce is

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Speaker 2: very focused on making sure that we day in and

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Speaker 2: day out, look at the improvements which you can see

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Speaker 2: in our results come through very clearly.

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Speaker 3: When we look at growth drivers, you've highlighted India Vanditta

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Speaker 3: as an important growth driver. How does that demand profile

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Speaker 3: compare to China's and what role do you see India

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Speaker 3: playing to offset any potential weakness coming through from China.

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Speaker 2: India continues to be the fastest growing large economy in

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Speaker 2: the world, and we are very excited about that structural

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Speaker 2: growth which is coming through in India. We can see

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Speaker 2: it in copper as well as in met coal demand,

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Speaker 2: which remains resilient out of India. To take the tea

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Speaker 2: for example, in India currently at one hundred and fifty

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Speaker 2: million tons odder of production and by twenty to fifty

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Speaker 2: we see that shifting four times, increasing four times and

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Speaker 2: which means really strong demand for met coal out of Queensland. Equally,

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Speaker 2: copper is growing very fast in India with the extra

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Speaker 2: smelters coming online which gets supplied through our operations in

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Speaker 2: Chile for example. So India structurally very positive, but very

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Speaker 2: different commodities as well. For China, iron ore demand is

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Speaker 2: really predicated on China, and again this year, in spite

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Speaker 2: of quite a volatile context, Chinese steel production has been

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Speaker 2: quite steady. This will be a sixth year of what

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Speaker 2: we think will be a billion tons of steel production

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Speaker 2: in China because of domestic demand as well as strong

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Speaker 2: exports which were there in the first half, which means

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Speaker 2: the demand for our iron ore continues to be very strong.

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Speaker 3: What about potass are you still on track for mid

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Speaker 3: twenty twenty seven for Jansen, and can you tell us

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Speaker 3: about some of the cost inflation pressures in Canada as well?

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Speaker 2: Yes, So for Jansen Project Jansen one, we have announced

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Speaker 2: recently a revised cost and scheduled guidance. Jansen will be

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Speaker 2: a fantastic multi decade asset for BHP. It will be

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Speaker 2: at the low cost of the cost curve, which means

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Speaker 2: it will have a our huge cash flow generation for

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Speaker 2: BHP for decades to come. Potash continues to be a

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Speaker 2: very strong and attractive commodity for BHP as long as

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Speaker 2: the population is growing, the diets continue to improve and

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Speaker 2: because of less arable land portage, dynamics of demand are

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Speaker 2: very positive.

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Speaker 3: There's been a lot of m and A, particularly amongst

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Speaker 3: junior and mid tier producers. What is BHPI ing in

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Speaker 3: the M and A space? Would you make another bid

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Speaker 3: for Anglo American as well?

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Speaker 2: You know, M and A is just one lever in

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Speaker 2: our toolkit of growth. And in the year gone by

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Speaker 2: we have actually done an acquisition of Vicunia, of one

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Speaker 2: of the very very high quality, largest undiscovered deposits in

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Speaker 2: Argentina in the last thirty years of copper, which is

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Speaker 2: a joint venture with Lundin's and that is something very exciting,

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Speaker 2: so we are doing. We have done both an acquisition

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Speaker 2: of Ecunia and organic growth across copper. We continue to

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Speaker 2: be focused now on organic growth because our suite of

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Speaker 2: growth options here in South Australia for copper, where copper

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Speaker 2: can go from three hundred kti to five hundred in

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Speaker 2: early twenty thirties and then double it to six fifty

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Speaker 2: kt of copper, as well as in Chile in which

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Speaker 2: we have a a huge growth program for Escondida Anos

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Speaker 2: I just mentioned in Vacunia and Argentina, as well as

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Speaker 2: our partnership with Rio in America's for resolution copper, lots

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Speaker 2: of organic growth options which are maturing very well and

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Speaker 2: very attractive as well.

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Speaker 3: How exposed are you though, VANDETA two? Rising trade protect Usianism,

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Speaker 3: especially what we've seen from the Trump administration since well.

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Speaker 2: So direct impact of tariffs continues to be very low

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Speaker 2: for BHP because only three to four percent of our

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Speaker 2: revenue comes directly from the US. However, if I were

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Speaker 2: to step back, broadly speaking, the volatility which gets created

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Speaker 2: due to industrial policy, fiscal policies, tariff policy does impact

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Speaker 2: overall trade flows and investment flows. And in spite of

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Speaker 2: all that, the commodity demand has remained very resilient, and

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Speaker 2: we do see that continuing. We think China will still

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Speaker 2: have a broadly five percent growth this year. India, as

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Speaker 2: I mentioned, continues to be the fastest growing economy and

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Speaker 2: overall global economic growth will be around three percent. With

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Speaker 2: resilient commodity demand.

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Speaker 3: And when data, the demand for AI no doubt continuing

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Speaker 3: to power growth for metals and minerals. But how does

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Speaker 3: that work in conjunction with your efforts, your net zero efforts.

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Speaker 2: So AI is continuing to be a very exciting revenue,

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Speaker 2: as you rightly said. One angle for BHP is that

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Speaker 2: that is giving huge demand for data centers, which are

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Speaker 2: very copper intensive. So this is giving another positive driver

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Speaker 2: of demand to the copper demand, which we are very

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Speaker 2: excited about being the largest copper producer in the world.

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Speaker 2: And second is what can AI do for our own operations,

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Speaker 2: be it in safety, be it in quality of decisions

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Speaker 2: because we have better data, be it in exploring resources

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Speaker 2: or in our value chain. So we remain very excited

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Speaker 2: about the potential that AI has around making our resources

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Speaker 2: better explored, better mind and through the through the value chain.

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Speaker 1: That was Vandita Pant, chief financial Officer at BHP. She

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Speaker 1: spoke with Juliet Sally at Osby's, which is Australia's leading

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Speaker 1: Fearangreed dot com dot Au. I'm Malcolm Thompson and this

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