Ground Breakers: BHP somehow forgets US$280m in staff payments, 29Metals calls for long term investor view on copper

BHP (ASX:BHP) has turned itself into the fair work mob, emerging as the latest major Aussie business to dud employees out of millions.

US$280m to be exact, or 430 million buckaroos in the local parlance.

A preliminary review by the miner has shown around 28,500 current and former Australian employees had their leave incorrectly deducted on public holidays stretching back to 2010.

An average of six days leave across that group, small stones that add up to several hulking shipments of iron ore once cobbled together.

The cost of the remediation will be the aforementioned US$280m pre-tax, something that will be investigated and updated for the world’s biggest miner’s full year results in August.

There is a bit more accounting to do, BHP may well have paid $9.6b to adopt a similar deduction issue from OZ Minerals alongside its Prominent Hill and Carrapateena copper mines.

It says 400 current and former employees at Port Hedland are also entitled to additional allowances due to an error with the employment entity in their contract.

“We are sorry to all current and former employees impacted by these errors,” The Big Australian’s president of Australia Geraldine Slattery said.

“This is not good enough and falls short of the standards we expect at BHP. We are working to rectify and remediate these issues, with interest, as quickly as possible.”

The $200 billion mining behemoth has self-reported to the Fair Work Ombudsman, but will no doubt cop some hits, and already is, from the Federal Government and Mining and Energy Union.

BHP came out swinging recently, saying it would have to review business decisions in Australia if Canberra proceeds with Same Job, Same Pay legislation it claims could cost it $1.3b.

SJSP has been a cause celebre for the MEU over east. BHP has been a specific target in its campaigns, due to the company’s use of an internal labour hire division to supplement its workforce.

Take the long term view on copper: 29Metals pleads with investors

29Metals (ASX:29M) is less red metal and more black and blue these days after a major flooding event that will force months of renovations to fully recover its Capricorn copper mine in Queensland and a perfectly imperfect storm of rising costs and falling copper prices that has seen its shares fall from a year high of $2.35 in January to just 69c today.

It’s a tough position to be in, given the company was flying high at over $3 early last year having listed at $2 in a 2021, which at over $500m counted as one of the largest non-coal mining IPOs on the ASX in years.

It has a clear runway as an investment prospect. The sale of OZ Minerals — part of which was famously founded by 29M chairman Owen Hegarty — to BHP for $9.6 billion this year leaves Aussie investors short on local copper stocks to punt.

With decade long mine lives behind 29M at its Capricorn ops in Queensland and Golden Grove in WA, Hegarty was quick to tell investors he believed the stock had been oversold, calling it not unpredictably – given he and his fund EMR Capital’s horses in the race – “a screaming buy out on the street”.

Behind that is a bullish outlook on copper itself and other base metals the company produces.

While the short term future at Capricorn, which suffered what 29M is calling a once in 200 year flooding event, is clouded, CEO Peter Albert said the company was adding to resources and reserves and preparing for strong copper market fundamentals.

“Against that backdrop of strong copper market fundamentals that Owen has talked to, 29Metals is extremely well positioned for that future and whether that’s (20)26, ’27, ’28, when those deficits start to materialise and we see the outcome of that in terms of prices, we are in a great, great position,” Albert said.

“We’ve got two assets in the best jurisdictions in the globe, both in Australia with with incredible resources, reserves, long life and great growth potential. So we’re in the right space with the right people at the right time.”

Brave faces

This is, to some extent putting a brave face on things.

But it is true the development pipeline for copper assets is pretty dry in Australia. Albert believes 29M’s polymetallic Golden Grove mine has “been going for 30 years (and) it will likely go for another 30 years.”

While Capricorn’s short term future was imperilled by the 500mm of rainfall over just five days in March, Albert says it is also turning out drilling results from its Esperanza South deposit that match up to the best in Oz.

“You don’t see results like this in the Australian context anywhere, nobody else is putting out results like this,” he said.

“70m at 2.8% copper, 41.8m at 2.71% copper and 23m at 3% copper, as we get deeper into the Esperanza South ore body it does exactly what we predicted it would do. The ore body gets wider and the grades get better.”

Whether investors sitting on big paper losses from the top of the market IPO can wait around for that market deficit to really kick off remains to be seen.