BHP, Rio Tinto chief executives focus on Bloomberg green metals

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BHP, Rio Tinto chief executives focus on Bloomberg green metals

After visiting their biggest customers in China, the bosses of the world's top miners are starting to focus on Bloomberg green metals.

BHP Group s Mike Henry and Rio Tinto Group s Jakob Stausholm led company delegations to China this week, two of the highest profile names among a flow of global executives returning to the world s second biggest economy after the end of Covid Zero. A theme that emerges from the trip is the need to cooperate with Chinese buyers to prepare for the changes brought by the global energy transition.

Read more: BHP to trial Carbon Capture With Major Chinese Steelmaker

BHP signed on a pilot program for carbon capture technology with major steelmaker HBIS Group. It also agreed to collaboration with two of China's biggest copper smelters on tackling the industry's climate footprint. Talk about low-carbon steelmaking also appeared prominently in BHP's talks with top steel mill China Baowu Steel Group, as well as at Rio's meeting with Nanjing Iron Steel United Co.

There are a lot of thorny issues between the miners and their customers that will get less of a public airing, particularly around China's desire to exert more control over minerals prices. Press releases on discussions to clean up the supply chain, however modest, shouldn't be dismissed as mere greenwashing.

China is attempting to reduce steel production in a bid to reduce the amount of carbon spewing from a sector that accounts for 15% of national emissions and provides the bulk of BHP and Rio's earnings. At the same time, the companies have no chance of slashing their Scope 3 emissions - generated by their customers and attracting environmentally conscious investors without spending on new steelmaking technologies.

The miners can't stand by and watch a crucial market slowly evaporate. Unless it is tackled collaboratively, they are making the case that reducing emissions in the world's biggest steel industry is too complex. Expect more discussions and press releases about cooperative ventures. But don't discount the possibility that real change is being seeded when top bosses come to visit.

After a two-day rally, iron ore fluctuated, as market watchers assessed a gradual recovery in China's construction activities needed to spark steel demand.

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If you want to know where oil prices are headed, look to the skies - specifically, China's skies.

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