BHP vows to tackle sexual harassment, racism at the company’s mines

View of BHP Group's Jansen potash project mine shaft in Canada. Picture: Reuters

View of BHP Group's Jansen potash project mine shaft in Canada. Picture: Reuters

Published Nov 11, 2022

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Ken MacKenzie, the chairman of BHP Group, which declared a final $3.25 (R58) dividend per share for the 2022 full year, yesterday admitted to sexual harassment and racism at some of the group’s mines.

BHP, nonetheless, reported $40.6 billion in earnings before interest, taxes, depreciation and amortisation (Ebitda), a 16% surge compared to the prior year.

Free cash flows at $25.2bn were up by 30% while net debt came in at below $400 million, the company said.

However, this did not cheer investors in the company on the JSE where its shares traded 2.76% weaker at around R458.10 in afternoon trade.

MacKenzie admitted and apologised for sexual harassment incidents at the company’s mines. He also committed to fighting racism at the workplace at a time the company is battling to contain labour fall-outs.

“I want to apologise to all those who have experienced or continue to experience, any form of sexual harassment, racism or bullying anywhere at BHP. We are determined to eliminate this harmful behaviour,” MacKenzie said at the annual general meeting of BHP Group yesterday.

With iron ore and nickel production in West Australia as well as copper production at Escondida in Chile, BHP also produces metallurgical coal and is developing the Jansen Potash project in Canada.

During the 2022 full year period, BHP Group merged its petroleum business with Woodside Energy and simplified its coal portfolio to focus on higher-quality metallurgical coal useful for steel making.

In the short term outlook, company executives said BHP Group would be confronted by “geopolitical landscape” complexities that have resulted in supply chain disruptions, particularly the Russian invasion of Ukraine.

Additionally, “economic conditions remain uncertain” while there are “ongoing labour and skills shortages” against the backdrop of differently paced recovery from the Covid-19 pandemic in various jurisdictions.

BHP Group CEO, Mike Henry, also told the company’s AGM that a project to unlock more copper output at the Escondida mine, including a new concentrator strategy and leaching opportunities, had been accelerated during the period under review.

He said the company was increasing exploration spend over the next two years on highly prospective areas at its Nickel West project. BHP Group was also increasing output at the Western Australian Iron Ore project to 300 million tonnes per annum.

For the quarter to the end of September, BHP lifted copper production by 9% to 410 kilotons compared to the same quarter last year. Strong concentrator throughput at its Escondida mine, as well as “record quarterly anode production at Olympic Dam” boosted its volume outturn.

The Western Australia Iron Ore unit raised production by 3% for the quarter period relative to the same period last year. Production of other minerals such as nickel was also stronger by about 16% at 21 kilotons for the quarter.

Ongoing labour shortages also weighed down output. BHP said it battled “substantial rainfall and labour constraints” in its coal assets, with metallurgical coal output marginally lower compared to the previous year, BHP said in October.

Henry said he expected “global macro-economic uncertainty in the short term to continue to affect supply chains, energy costs, labour markets and equipment” and materials availability.

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