BHP CEO Mike Henry has responded to the Queensland Treasurer’s suggestion he may strip BHP of its leases in the state unless it reconsiders the decision to pause new investments.
Cameron Dick has urged the miner to reconsider its plans to stop new investments in the state in response to the state’s controversial coal royalties program. The Treasurer said the Queensland Government would look at cancelling BHP’s leases if it doesn’t fulfil its financial obligations.
“The strength of BHP’s balance sheet and the impending windfall it will make from selling the Daunia and Blackwater mines shows just what BHP can achieve when it focuses on its core business,” Dick said.
“We want those companies to properly develop the leases that they have been granted by the people of Queensland. If they fail to do so without legitimate commercial reason, our government has the power to act.”
BHP chief executive officer Mike Henry responded later in the week.
“If returns come down because of a higher fiscal regime or higher royalty regime, and at the same time risk goes up, that impedes the attractiveness of those investments relative to other options elsewhere,” Henry said.
“I don’t think that’s particularly controversial.
“So the opportunities are there, but capital – not just for BHP – generally speaking, capital opportunities … need to compete (with) other opportunities in the marketplace.
“And all we’re saying is that given what’s occurred recently, the opportunities elsewhere may be more attractive for growth.
“Again, we’re continuing to invest in sustaining the underlying existing business.”