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The head of the world’s largest mining company said the outlook for the world economy depends on China’s ability to stimulate domestic consumption as the Trump administration’s tariff levies threaten to disrupt global trade.
Mike Henry, CEO of Australia’s BHP, said the direct tariff impact on miners is “limited,” but said the slow potential for economic growth and the fragmented trade environment are even bigger issues.
“Trade flows to shift towards a consumption-driven economy and adapt to the new environment are key to maintaining global outlook,” Henry said.
Comments from the Melbourne-based miner were repeated a day ago when rival Rio Tinto pointed out “uncertain future impacts of tariffs on upcoming commodity markets.”
Global mining companies have been driven by the country’s booming property and industry sector due to China’s demand for goods such as iron ore and copper over the past 20 years.
While weakness in China’s real estate market has curtailed sector outlook over the past year, miners, including BHP, have expressed confidence that China’s plans to stimulate domestic consumption and restore confidence in the economy will strengthen demand.
According to BHP on Thursday, copper production rose 10% in the three months leading up to the end of March, but iron ore was flat, with nickel and coal volumes falling.
Minors are focusing on expanding copper production to meet future demand for goods that are considered key to the energy transition.
It produced 1.5 million tonnes of copper in the nine months since the end of March. This is a record of performance at the Chilean mine and stabilizing assets in South Australia, causing bad weather at the beginning of the year.
BHP stock, which fell 8% in the past month due to market turmoil caused by the looming trade war between China and the US, won more than 1% on Thursday.
Analysts said the “robust” production performance confirmed that the company provides volume at the top of the forecast for most of its major products.
Miners continued their push to get out of coal assets, revealing this week that by 2030 they received government permission to close the Arthur Mountain Mine in northern New South Wales – overturning previous plans to run the huge site until 2045 and instead looking to see if the site could be converted into a hydroelectric facility.
