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The head of the world’s largest mining company has said the outlook for the global economy depends on China’s ability to invigorate domestic consumption, as US President Donald Trump’s tariffs threaten to disrupt global trade.
Mike Henry, chief executive of Australia’s BHP, said the direct tariff impact on the miner had been “limited”, but the potential for slower economic growth and a fragmented trading environment was a bigger issue.
“China’s ability to shift towards a consumption-led economy and for trade flows to adapt to the new environment will be key to sustaining the global outlook,” said Henry.
The comment from the Melbourne-based miner echoed rival Rio Tinto’s a day earlier, when it pointed to “an uncertain future impact from tariffs on the commodity markets going forward”.
China’s booming property and industrial sectors have helped drive demand for commodities including iron ore and copper over the past two decades, boosting global mining companies.
Weakness in the Chinese property market has stifled the sector’s outlook over the past year, but miners including BHP have expressed confidence that China’s plan to revitalise domestic consumption and restore confidence in its economy will bolster demand.
BHP on Thursday said copper production had increased 10 per cent in the three months to the end of March, while iron ore was flat and nickel and coal volumes declined.
The miner has focused on expanding its copper production to meet future demand for a commodity considered key to the energy transition.
It produced 1.5mn tonnes of copper in the nine months to the end of March, a record owing largely to the performance of its Chilean mines and a stabilisation of its assets in South Australia, which were hit by bad weather earlier in the year.
BHP shares, which have fallen 8 per cent over the past month in the market turmoil from the looming trade war between China and the US, gained more than 1 per cent on Thursday.
Analysts said the “robust” production performance affirmed that the company would deliver volumes at the upper end of its forecasts in most of its key commodities.
The miner continued its push to exit coal assets, revealing this week it had received government permission to close its Mount Arthur mine in northern New South Wales by 2030 — reversing a previous plan to run the giant site until 2045 — and would instead explore whether it can convert the site into a hydropower facility.
