BHP Warns Australia Risks Losing Out in Mining Amid Shifting Global Competition
BHP Group's Australia President, Geraldine Slattery, has warned that the nation can no longer rely solely on its traditional mining export markets and is unprepared to face a new era of lower-cost competitors. Speaking in Brisbane on Monday, Slattery highlighted that the boom in demand from China's industrialization has now moved past its aggressive growth phase.
BHP, the world's largest miner, and rival Rio Tinto have acknowledged that Chinese steel demand is plateauing. Other critical commodities, such as nickel—essential for the energy transition due to its use in electric vehicles—are increasingly being pursued by countries with a cost advantage over Australia. "In this shifting world, there are many competitors aggressive in their pursuit of market share and the technology that unlocks a lower cost of supply," Slattery said.
Nickel prices have fallen significantly, trading at roughly half the level seen in late 2022, due to a flood of supply from Indonesia, where Chinese companies have invested heavily in nickel processing facilities. This market shift forced BHP to make the challenging decision to temporarily suspend its nickel operations in Western Australia.
Slattery emphasized that Australia must ensure long-term competitiveness or risk losing market share to countries with lower royalty regimes and mining costs. Her remarks come at a time when miners in Australia are facing increased pressure from unions demanding pay rises, alongside changes in coal royalties in Queensland that have hit revenue. "The sugar hit of revenue won’t leave the state better off in the long run if investment is driven elsewhere," she cautioned.
Slattery's comments reflect growing concerns within the industry about Australia's ability to remain competitive amid changing global dynamics and the rise of more cost-efficient rivals. Ensuring competitive royalty regimes and operational costs will be crucial if Australia is to maintain its standing in the global mining landscape.
