US protectionism under President-elect Donald Trump risks slowing the global transition to green energy, according to the chief executive of mining company BHP.
Trump’s proposed import tariffs and the rising risk of a global trade war pose “key challenges to the energy transition”, Mike Henry told the Financial Times.
Australia-based BHP owns the world’s largest copper mine. Copper mining is one of the metals essential to decarbonizing the energy system, as it is needed for components in technologies ranging from power cables to wind turbines and solar panels.
The geopolitical impact of U.S. policies will “slow down the mobilization of capital to develop the supply of metals and minerals that the world needs” to realize the energy transition, Henry said in an interview in Paris. .
Measures such as trade tariffs risk weakening “the aggressiveness with which some countries pursue energy transitions,” Henry said.
The warning heightens concerns that President Trump’s protectionism threatens the green transition, exacerbating challenges such as underinvestment in critical supply chains and delays in developing and permitting clean energy projects. There is.
Renewable energy is growing rapidly, with capacity additions in 2023 increasing by more than 60% year-on-year, marking the fastest growth ever. But even before President Trump’s victory in November, the pace of growth was slowing due to other obstacles such as rising interest rates and tight supply chains.
Trump won the election by a landslide after campaigning on a promise to impose tariffs of up to 60% on imports from China, one of BHP’s biggest markets.
“The world needs the metals and mineral supplies needed to support not only the energy transition, but also population growth, urbanization (and) rising standards of living, to be met in the timelyest possible way and at the lowest possible cost. “It’s essential,” Henry said. .
BHP is building its product portfolio around these ‘forward-looking’ trends, with a primary focus on copper. “We already have the largest resource base in the world, but this product is very attractive and we want to grow even further,” Henry said.
BHP chiefs say copper was the main driver behind the company’s recent $39 billion takeover of British rival Anglo American, and that the combined company would own a tenth of global copper production. He said he would be able to control it.
The takeover bid fell through in May, but a six-month moratorium required by London’s takeover rules ended, leaving BHP free to consider another bid.
Mr. Henry declined to comment on new acquisition plans, but stressed that “there are no M&A deals that BHP absolutely has to do.” Instead, the company focused on “organic, early-stage opportunities,” such as its joint acquisition of Argentina’s copper mining company Philo with Canada’s Lundin.
BHP is investing $11 billion in Canada’s Jansen potash mine, which will give it control of 10% of the global market for the key fertilizer ingredient by the early 2030s.
Mr Henry said BHP could withstand the impact of President Trump’s protectionist policies on the mining industry. He added that while these measures had been “generally negative for the global economy and for products”, BHP had been more resilient than “most mining companies”.
BHP’s major operations in Australia, Canada and Chile all benefit from free trade agreements with the US, giving the company a competitive edge against rivals, Henry said.
He cited the Inflation Control Act, introduced under outgoing President Joe Biden, as a potential antidote to some of the challenges facing the mining sector, providing support for the opportunities created by energy. He cited measures such as subsidy packages aimed at expanding renewable energy. transition.
President Trump has vowed to eliminate these subsidies when he takes office in January, as well as to phase out offshore wind power and shore up the fossil fuel industry.
Additional reporting by Rachel Millard in London
