BHP’s new boss favours new builds over M&A

BHP's CEO Brandon Craig is placing greater emphasis on expanding through new projects rather than pursuing acquisitions, dismissing rumors of a potential deal for uranium developer NexGen Energy due to high valuations. Craig, leading BHP's first full-year as CEO, reaffirmed the company's focus on its four core commodities: copper, iron ore, steelmaking coal, and potash.

He emphasized that BHP remains invested in these areas, particularly copper, as the driving force behind its growth. Craig noted that the company's internal projects are significantly cheaper to develop than acquiring rivals, with capital costs for BHP's copper pipeline estimated at $16,000 to $30,000 per tonne, compared to a much higher $85,000 per tonne for listed pure-play copper companies.

While BHP already contributes about 5% of global uranium production, Craig didn't address speculation about the company potentially exiting its Australian BMA coal business, stating that metallurgical coal remains attractive and integral to BHP's portfolio if market conditions evolve as projected. Craig acknowledged past missteps in the Jansen potash project but assured that the company is committed to strengthening its project delivery capabilities.

He also highlighted BHP's confidence in the long-term outlook for potash, projecting demand to rise from the current 70 million tonnes to 100 million tonnes by 2050, making Jansen a vital component of BHP's growth strategy alongside its copper projects, which are currently deemed too lucrative to be replaced by expensive acquisitions.