Monsters of Rock: BHP boss pours cold water on green steel

The jawing between the world’s biggest miner, BHP (ASX:BHP) and the head of their Pilbara cousins Fortescue (ASX:FMG), Andrew Forrest, is continuing to deliver the goods.

The two have been locked in a battle for control of relatively unheralded Canadian nickel explorer Noront Resources (TSX-V:NOT), which has seen each progressively raise the stakes over the course of past five months.

Now BHP boss Mike Henry says the economics will prove challenging for a quick shift from steelmakers from coal to green hydrogen, a technology Forrest is firmly on the bandwagon of.

Henry told the annual Financial Times Mining Summit he thought the high level of investment in existing blast furnaces meant it could take two to three decades and hundreds of billions of dollars in investment to replace coke with hydrogen in steel production.

“Hydrogen will have its day, but it’s going to take some time to get there given current economics… and the massive quantity of capital needed to develop green DRI,” he said.

Henry also touched on BHP’s interest in copper and nickel assets outside its operating jurisdictions in Australia, Chile and Canada, amid reports it was eyeing off a copper project around Ivanhoe Mines’ Kamoa-Kakula mine in the DRC.

Meanwhile, BHP says it has taken a step towards its decarbonisation goals by selling its first carbon neutral product — a parcel of copper from its Chilean mines traded to US processor Southwire.

The transaction used blockchain and offsets to trace the greenhouse gas emissions generated in producing and selling the product.

“This is our first ever ‘carbon neutral’ sale of any of our commodities,” BHP sales and marketing officer Michael Hovers said.

“The pilot helps improve understanding of greenhouse gas emissions in the copper value chain and demonstrate the role high-quality offsets can play, as a complement to operational decarbonisation.”

BHP (up 3.15% as of 3.45AEDT), FMG (up 2.48%) and Rio (ASX:RIO) (up 4.1%) were all among the top large caps on a day when the materials index led the ASX 200 with a 1.83% gain.

WEST AFRICAN RESOURCES (ASX:WAF)

Gold stocks have trended down this year despite the strong underlying financial performance of most gold producers.

Proving Africa does not have to be a discount jurisdiction for investors when your operations are on point, West African Resources has defied the trend.

It recently announced a record quarter of production from its Sanbrado mine in Burkina Faso, where the newly-minted gold miner expects to now exceed its 280,000ozpa guidance in 2021, its first full year of operations.

Results such as those have sent $1.1 billion-capped West African shares higher this year, up 13.76% year to date.

By contrast, the Van Eck Gold Miners ETF (ASX:GDX) is down 13.13% over the same period.

West African was up ~9% today to lead the mid-cap miners despite the tailwinds provided for copper producers like Sandfire Resources (ASX:SFR) after base metals prices rose overnight.