BHP’s Slattery says Australia must cut red tape, power costs, to compete

BHP's head of Australia, Geraldine Slattery, warned that Australia must accelerate environmental approvals and enhance access to affordable power to remain competitive for global mining investment, citing increased competition from nations like the U.S. which are actively incentivizing the sector. This concern is underscored by BHP CEO Mike Henry's consideration of reopening U.S. mines, despite BHP's recent commitment of A$840 million towards its Olympic Dam copper operations in South Australia with a decision to double output by mid-2027. Slattery also highlighted Australia's declining labor productivity and called for tax cuts, improved training, and greater adoption of automation to address these challenges and attract future capital.

Analysis

BHP's head of Australia, Geraldine Slattery, emphasized the critical need for Australia to expedite environmental approvals and enhance access to affordable power to maintain global mining investment competitiveness. This urgency stems from increased competition, particularly from the U.S., which is actively incentivizing its mining sector, as evidenced by BHP CEO Mike Henry's consideration of reopening U.S. mines.

Slattery highlighted Australia's declining labor productivity, currently at a sixty-year low, and advocated for tax cuts, improved workforce training, and greater adoption of automation and AI. Despite these systemic challenges, BHP recently committed over A$840 million ($555.16 million) to its Olympic Dam copper operations, targeting a decision by mid-2027 to double output.

The comments, coming from a potential successor to BHP's CEO, underscore significant strategic concerns for Australia's resource sector and BHP's long-term capital allocation. While BHP continues to invest in key Australian assets, the explicit warnings suggest potential future capital redirection if policy reforms are not enacted. The mixed sentiment and cautious tone reflect this dual perspective of ongoing investment alongside policy-driven risks.

Key Decisions for Investors

• Monitor Australian policy developments regarding environmental approvals, power costs, and tax reforms, as these directly impact the long-term attractiveness of Australian mining investments.
• Evaluate BHP's capital expenditure allocation across different geographies, particularly observing any shifts towards U.S. projects versus Australian ones, which could signal changing investment priorities.
• Consider the implications of declining productivity and potential leadership changes at BHP, assessing how these factors might influence operational efficiency and strategic direction.