BHP (ASX: BHP) has taken a key
step towards its goal
of reaching net-zero by 2050 after receiving
the first of five LNG-powered carriers to transport iron ore from Australia’s Port
Hedland to Asia.
The 299-metre (981 ft) long Mt.
Tourmaline Newcastlemax ore carrier was built by Eastern Pacific Shipping in
China and stopped off in Singapore to take on LNG fuel. It will next head to
Port Hedland in Western Australia to load iron ore that will then be shipped to
China.
The world’s largest miner said
that introducing LNG-powered ships would eliminate NOx (nitrogen oxide) and SOx
(sulphur oxide) emissions and reduce carbon dioxide emissions by about 30% per
trip.
BHP has inked several agreements
in the past year with some of the world’s largest steel mills to co-operate on
low carbon technologies, including Japan’s JFE
Steel,
South Korea’s Posco, as well as Baowu and HBIS in
China.
“This is not small. Together
these four steel mills account for 12% of global steelmaking. Whatever the
future landscape will be in steelmaking, we will be part of that,” BHP chief
commercial officer Vandita Pant said
in a media release.
While the vessel can also still
burn traditional, low sulphur fuel oil, BHP intends to use LNG to power Mt.
Tourmaline as much as possible, said Pant.
Scope 3 emissions — those
generated indirectly when consumers burn or process commodities
produced by BHP — are undoubtedly the hardest to tackle, but they account for
as much as 97% of BHP’s total, according to investors group Market
Forces executive director Julien Vincent. They are also larger than
Australia’s total emissions in 2019 of 532.5 million tonnes of carbon
dioxide equivalent, so stakeholders were expecting more.
“The targets fall short of the
~42% reduction that would be required to align with a 1.5°C pathway from 2020
to 2030,” Market
Forces said. “Put
simply, BHP has deliberately chosen not to meet the Paris Agreement’s ultimate
aim of holding warming to 1.5°C.”
Cleaning
up portfolio
BHP is the top exporter of coking
coal used in steelmaking and number three in iron ore, the raw material used
for steel.
The highly polluting process of
making steel involves adding coking coal to iron ore to make the alloy and is
responsible for up to 9% of global greenhouse emissions.
Last year, BHP invested in a
start-up company seeking to develop less-polluting
ways of
making steel.
It also inked a deal
with mining equipment giant Caterpillar (NYSE: CAT) to speed up the
development and deployment of zero-emissions mining trucks at BHP sites.
The company has been working on
cleaning up its portfolio by exiting
thermal coal, divesting
metallurgical coal assets, and increasing its exposure to what chief executive
officer Mike Henry calls “future-facing commodities”. They include metals such
as copper and nickel — key materials for the batteries and wiring that are key
to the clean-energy transition.
MINING:COM