BHP halted project that would cut global emissions by 1.7m tonnes a year

Internal documents from BHP show the mining giant dumped plans for an iron ore processing plant in the Pilbara. (Four Corners) Leaked documents show BHP halted plans to process iron ore at its Jimblebar mine in the Pilbara last May that would have significantly cut carbon emissions. The project had been in the works since 2022 but the documents suggested it would not be as profitable as the mining giant would like. BHP says it is on track to meet its 2030 global emissions reductions target and reach net zero by 2050. Link copiedShareShare articleMining giant BHP dumped a planned iron ore processing plant that would have drastically cut emissions, despite being under "pressure" to help its customers overseas make greener steel and saying the project was an "excellent social value opportunity". Documents leaked exclusively to Four Corners and Guardian Australia show work on the plant in WA's Pilbara region that could cost up to $US1.2 billion ($1.7 billion) was stopped in May last year as it was no longer considered a priority. They were among hundreds of pages of documents that revealed how BHP sought to publicly position itself as a climate leader while privately locking in fossil fuels. In 2022, BHP began planning for the so-called beneficiation plant — where some impurities are removed from the iron ore — at its Jimblebar mine site. The documents outline how BHP initially believed the plant would be a win for both the company and its customers, particularly its Chinese steel mill clients. Hundreds of pages of internal BHP documents reveal how the company sold itself as a climate leader while internally finding reasons to put off action in the Pilbara. At the time, BHP said the plant would pay for itself within eight years because it could charge more for a higher-grade product that required less coal to be used, making it more attractive for overseas steel mills pursuing emissions-reduction targets. In the documents, BHP stated that the plant was strategically important and well-aligned with shareholders' expectations and the company's own decarbonisation targets. It also "recognised" there was "pressure from society, government and investors to decarbonise the steel industry", and said producing high quality iron ore was the cheapest way for steel makers to cut emissions. BHP estimated the Jimblebar project would reduce emissions for its overseas customers by 1.7 million tonnes every year — equivalent to the miner cutting 75 per cent of its Pilbara emissions, according to its own internal documents. While BHP was likely to benefit in the short term through high prices, the plant had potentially far greater strategic value. The miner said it would shore up future iron ore exports if Australia's regional trading partners moved to impose penalties or a carbon tax on lower-quality iron ore. "Higher quality and cleaner products may also facilitate brand premiums," it said. But by May last year, with 80 per cent of the design completed, BHP halted the project. An internal memo said the plant was "not well placed to compete" for funding with other projects which helped BHP increase the amount of iron ore it shipped each year, and that made the "economics marginal". In other words, the project would be profitable but not profitable enough for BHP. BHP declined to provide any detail about why the Jimblebar project was stopped. BHP sends its raw iron ore offshore, where it is processed into steel. (Four Corners: Ryan Sheridan) Pausing the project also has implications for China's broader emissions reduction targets. As the world's largest steel producer, China has big ambitions to decarbonise the industry, which makes up about 15 per cent of the country's total emissions. Professor Ross Garnaut, who authored two landmark Australian government studies on the economics of climate change, said China was "very serious" about decarbonising its steel makers. "They took a decision five years ago to completely decarbonise steel by about the middle of the century," he told Four Corners. China's biggest steel maker, Baowu Steel Group, has set a goal of reducing its emissions by 30 per cent from 2020 levels by 2035 and reaching net zero by 2050. Tim Buckley from think tank Climate Energy Finance said Australia had an important role to play in helping China decarbonise its steel industry. "Decarbonising the Chinese steel industry is the single biggest decarbonisation opportunity in the world," he said. The mining giant's delay in the rollout of renewable energy and a fleet of electric trucks and trains in the Pilbara has raised doubts inside the company about it meeting its ambitious climate goal. While the Pilbara plant would have helped reduce China's so-called scope three emissions, which come from turning iron ore into steel, BHP does not have a firm target for the emissions. Its target to reach net zero emissions by 2050 is limited to scope one and two emissions, which occur during the mini

BHP halted project that would cut global emissions by 1.7m tonnes a year

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