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Monsters of Rock: Gold and base metals drive miners lower, BHP flat after announcing US$4bn green spend
Mining
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- Gold and base metals stocks falter to lead the ASX materials index lower
- BHP says social value will be front and centre of its decision making as it pledges US$4bn to decarbonisation by 2030
- Strandline begins mining early at Coburn mineral sands development
Materials stocks ended Wednesday in poor form, slipping 1.47% as gold, nickel, rare earths and copper miners led the market lower.
Northern Star (ASX:NST) couldn’t follow on from positive news about a major mill refurbishment at Kalgoorlie’s Super Pit yesterday.
Fellow goldies fell as the precious metal (US$1820/oz) fell under pressure from a stronger US dollar. Newcrest (ASX:NCM) dropped 3.93%, Silver Lake Resources (ASX:SLR) tumbled 8.15%, Evolution (ASX:EVN) lost 6.98% and Regis (ASX:RRL) fell 6.53%.
Nickel and copper stocks were similarly pressured, with IGO (ASX:IGO), OZ Minerals (ASX:OZL) and Nickel Mines (ASX:NIC) among the losers.
Monster share prices today:
BHP to spend big on green ambitions
Pretty much all the big miners are boxed in now by the demands of investors who want to see companies big enough to buy entire nations commit to social and environmental change.
Rio Tinto (ASX:RIO) is pumping US$7.5 billion into decarbonisation over the next eight years to halve the emissions of its mine sites, with major tenders out for renewable power supply for the aluminium smelters on Australia’s east coast.
Fortescue (ASX:FMG) is on a maybe quixotic quest to become the world’s largest supplier of green hydrogen and will spend big on the 5.4GW Uaroo renewable energy hub near Onslow in the Pilbara.
BHP (ASX:BHP) meanwhile has updated the Social Value framework it first issued to punters in 2019, pledging to spend US$4 billion on decarbonisation initiatives out to 2030.
That is in service of hitting a target of reducing its own emissions by 30% (though not necessarily those of its customers, whose Scope 3 emissions make up the vast proportion of BHP’s emissions footprint).
In addition a new social value framework will be incorporated into funding and strategic decisions alongside a “2030 scorecard” which will be subject to regular reporting and incorporate six pillars of decarbonisation, environment, Indigenous partnerships, workforce, communities and supply chains.
BHP chief legal governance and external affairs officer Caroline Cox says proving its social value credentials will be critical to gaining access to markets, talent, approvals and capital going forward.
“We know all these elements are important to our investors… and will increase our access to equity and debt markets,” she said.
“Essentially, the commodities we produce and how we produce them are our resume – they will open the door to future opportunities, partnerships, capital and talent.”
On top of its climate commitments, BHP has also introduced a new goal for 30% of the land and water under its stewardship to be under conservation, restoration or regenerative practices by 2030.
It also plans to have at least one pilot or industrial scale low emissions steelmaking trial under way by FY24.
BHP (ASX:BHP) share price today:
Strandline appears to beat the rush at Coburn
Projects are getting canned left, right and centre as construction budgets are blown out of the water by inflation.
There are a few success stories around the traps from mines that were approved before the Russian war with Ukraine and consequent run up in diesel prices.
One is Strandline’s (ASX:STA) Coburn mineral sands mine in WA, where the emerging miner today said it is two months ahead of schedule on the start of open pit mining.
That will take place from July, with $400 million capped Strandline saying Coburn remains on track to produce heavy mineral concentrate from the fourth quarter of 2022.
Pre-production drilling has also improved the mine plan, lowering its strip ratio from 0.7 to 0.5 over the first two years, meaning less waste will be send for processing.
Commissioning of a wet concentration plant and hybrid power station is also due to begin next month.
Coburn is expected to generate $4.4 billion in revenue over its 22.5 year mine life, with annual EBITDA of $104m and pre-tax NPV of $705m.
It could be extended out to 2060 if resources to the north of the Coburn mineral sands deposit are converted to reserves.
