BHP boss backs Australia's Critical Minerals Strategy

In February, Henry urged the Australian government to act on critical minerals after the unveiling of the US' Inflation Reduction Act and the Canadian Critical Minerals Strategy.He noted last week's release of Australia's Critical Minerals Strategy, which was slammed by some parts of industry and government."I did see some criticism that the new strategy didn't contain even more by way of subsidies," Henry said."For what it's worth, I think this is absolutely the right approach."Trying to match the Inflation Reduction Act is a losing proposition. Australia is simply too small."Henry said Australian federal and state governments should focus on making investment more attractive."Not simply due to the sugar hit of a subsidy," he said."There is enough investment appetite for good projects under the right conditions."Henry called for better productivity and fiscal settings, faster permitting and an industrial relations system that delivered productivity, flexibility, and competitiveness to drive job creation and wage growth."Under those conditions, the capital will flow," he said."I wish I could say that all the settings are moving in the right direction, but unfortunately, for the nation, that is not the case."Henry said the Australian government had stabilised the country's relationship with China, ruled out changes to the Fuel Tax Credit and increased migration and access to skills.He also praised the South Australian and Western Australian governments for facilitating the development of the Northern Water Supply project and the A$40 million critical minerals investment, respectively."But worryingly, some policies are taking us in the wrong direction and are going to make Australia less competitive: this includes recent and proposed changes to industrial relations legislation, particularly the Same Job Same Pay legislation and multi-employer bargaining," Henry said."Capital is global. It will flow to where the risk/returns ratio is most attractive."Where governments act unpredictably and unreasonably, they increase risk for investment."Henry used Chile and Queensland as examples of two very different government approaches last year."In Chile, there was a push to raise copper royalties. Notwithstanding a government for the strong left, they engaged industry, and sought to understand and to work towards an outcome that struck a balance between public needs and what was required to keep industry competitive," he said."This process of engagement played out over the course of several years. It was respectful, with a focus on understanding and collaboration."Henry said the outcome and process maintained investment attractiveness and ensured that BHP would continue to invest in Chile."By way of contrast, and it saddens me to have to say this on this stage and in this place, but I think we owe it to our host state and to this audience, to be honest - here in Queensland, the approach to raising royalties could not have been more different," he said."No industry engagement, no effort to understand and no interest in understanding."The near tripling of top-end royalties makes Queensland the highest taxing regime in the world. I repeat, the highest taxing regime for mining in the world."As a result, Henry said BHP would continue to invest in WA and SA, but not in Queensland under the current conditions.He said up to US$100 billion of additional capital would need to be invested by the resources sector annually in order to reach Paris climate goals."Capital flow is the lifeblood of this sector and the settings to attract and facilitate capital are going to be the key determinant in whether we are collectively able to rise to the challenge and capitalise on the opportunity ahead or not," he said."The challenge we face is massive, among the most ambitious and important we have faced as a global community for quite some time."Not only is the scale of the challenge massive, the pathway through that challenge is narrowing. To succeed, we need every variable working in our favour."Through our actions, the mining industry can be a force for change; a catalyst of the most significant shift in global megatrends."We have time to plan and invest for the future, but no time to lose."The decisions we make in the short term will shape our world for decades - perhaps centuries - to come."

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BHP boss backs Australia's Critical Minerals Strategy

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