BHP Group Leading the Technology Adoption while Bill Ferris Sense Lack of Collaboration

  • Nov 29, 2019 AEDT
  • Team Kalkine
BHP Group Leading the Technology Adoption while Bill Ferris Sense Lack of Collaboration

BHP Group Limited (ASX: BHP)- the Australian iron ore giant is restructuring the operations and collaborating with the technology companies as was originally promised by the BHP’s CEO Andrew Mackenzie in FY2019.

BHP’s key for longer-term sustainability is its continuous investment and improvement across the technologies it incorporates across the different measures of its quality operations. Be it the mining operations or the value chain, BHP implements the relevant technology to minimise the associated risk and maximise the output- A strategy very well known to the investing community.

The investment in technologies is not unprecedented to BHP, as the miner is constantly adopting technology-related planning and implementing it across the array of operations. For example, to attain the net-zero emissions, BHP decided to invest heavily in the low-emissions tech (or the LET Strategy).

The low-emissions technology strategy of the company is to first adapt and integrate mature technologies such as LEVs or light electric vehicles in the operations to increase efficiency.

The second phase of the LET strategy is to create road maps for development and adoption of other low-emissions technology to attain net-zero emissions, which might also witness various trials and demonstrations of technology in the production environments.

While the third phase of the LET strategy is to look for early stage low-emissions technology with high potential for results ahead in future, and it is the phase where the company would seek opportunities for collaboration and research, to accelerate the development.

To know, why BHP needs the LET strategy and how it is intending to achieve longer-term sustainability, do read: BHP Climate Focus- A Ticket to Long-Term Sustainability?

The adoption of Carbon Capture and Storage (or CCS) Tech is another innovative move dictated by the miner, and the company is currently with the partners to further accelerate the technology. The CCS tech holds the potential to play a vital role in reducing emissions from industrial downstream processes such as steel production (or Scope 3 Emissions);

  • The CCS investments and partnerships of the company focus on mechanisms to reduce costs and accelerate development timeframes, with investment dedicated towards knowledge sharing from commercial-scale projects, development of sectoral deployment road maps and funding for research and development at leading universities and research institutes.

Recently, BHP demonstrated the stance of the company towards the adoption of new technologies across the production chain and operation by installing a desalination water plant at the Escondida and Spence copper mine in Chile.

To address the environmental issues, BHP also secured renewable energy agreement for copper mines of three terawatts per hour per year.

To know about the installation of the desalination plant and its aim, we encourage you to read: Australia Leaps Towards Renewables; BHP Replaces Coal with Renewable Energy at Chile

Another innovative measure taken by BHP across the value chain was the integration of LNG-fuelled ships into the maritime supply chain to eliminate the nitrogen oxide and sulphur oxides along with carbon footprints.

In July 2019, the LNG-fuelled bulk carrier of the company delivered 27 million tonnes or 10 per cent of the BHP’s iron ore supply, and the tender is still open for the ship owners, banks and LNG fuel network providers.

The adoption of the LNG-fuelled fleet and investment in the further development of such fleets would allow the company to meet the IMO 2020 guidelines, which sets upon the reduction of 50 per cent in the greenhouse gas emissions by 2050.

The company has also collaborated on other industry wide initiatives to address the issue of climate change and reduce greenhouse gas emissions across the shipping industry, such as the development of the RightShip GHG emissions rating.

RightShip is a leading maritime risk management and environmental assessment organisation incorporated and equally owned by BHP, Rio Tinto Limited (ASX: RIO) and Cargill has developed a method to measure the greenhouse gas emissions of a vessel, which involves the establishment of a practical greenhouse gas emission (GHG) rating system (A to G) based upon the Existing Vessel Design Index.

To address the emissions issue, BHP does not charter any vessel below the rating of F and G, and currently, 62 ships of the company are using the RightShip GHG Rating System

To know more about the guidelines and IMO 2020, do read: The Approaching Deadline Of IMO Emission Standards Caught The Energy Investors’ Eye

Transformation and the Innovation Centre

The strategy of the company is to hold quality assets, in the best commodities with the best capabilities. To implement such strategies and innovative technologies across the production chain, the company established the Innovation Centre in 2017.

The Innovation Centre pulls the future forward by spotting new technologies, which holds the potential to bring the transformation across the company’s global operations, and the centre has provided an array of innovative measures, which covers the entire supply chain from geology to extraction and processing to transport.

The Innovation Centre of the company remains a flagship tech initiative, which combines asset and operational excellence.

Despite such innovative measures adopted by the miner, the federal government's chief innovation adviser- Bill Ferris believes that the big businesses in Australia are failing to collaborate with the Universities and Researchers.

However, the iron ore giant claimed in a summit organised by one of the leading financial media in Australia- AFR, that the miner is already transforming to avoid potential extinction.

The chief technology officer of the company- Diane Jurgens also mentioned about the inhouse technology team established by the company to work with entrepreneurs and technology companies.

Ms Jurgens also mentioned about the current event held by the company, where BHP invited 100 innovators to join the company in addressing five problems faced by the resources group.

The stock of the company remains in the rally after a correction, which started from $41.980 (Day’s high on 24 July 2019) to the level of $34.420 (Day’s low on 26 August 2019).

Post hitting the low of $34.420 the stock witnessed a turbulent ride; however, in the status quo, the stock is witnessing a surge with price recovering from $34.420 to the present high of $38.690 (as on 29 November 2019).


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