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BHP (NYSE:BHP) will be restrained about M&A opportunities and look to exploration, organic growth and higher productivity to raise its output, CEO Mike Henry said Friday.
Bumper profits last year mean BHP (BHP) has a sizeable war chest at its disposal, but “we want to be quite disciplined” on potential deals, Henry told a Financial Times mining conference in London.
“OZ is a nice-to-have, it is not a must-have,” the CEO said, referring to BHP’s A$8.4B bid for OZ Minerals (OTCPK:OZMLF) in August that was rejected by shareholders, which prompted speculation the company might return with an upsized offer.
Henry said he was cautiously optimistic on the outlook for China, which he sees providing “a bit of stability or underpinning to global economic growth over the next 12 months. We are seeing some green shoots,” pointing to increased property sales and completions.
The CEO also predicted the copper market will be in “a little bit oversupply” in the next few years before potentially swinging to a deficit by the end of the decade as the energy transition accelerates and more easily accessible, richer seams of copper become more difficult to find.
The risk is there will be “a mismatch between the timing of increase in demand and when supply meets that demand,” Henry said.
Freeport McMoRan CEO Richard Adkerson said this week that copper futures that have fallen nearly 30% from a peak in March do not reflect a “strikingly tight” physical market for the metal.
