BHP chief to ‘stick up for globalization’ as trade tensions bite
The head of the world’s biggest miner BHP said he will “stick up for globalisation” and is more worried about the damage trade tensions are inflicting on the world economy than their impact on demand for the commodities BHP produces.
BHP on Tuesday posted annual profit of $9.12 billion, a bumper figure built largely on selling iron ore, coal and copper to China, the world’s largest importer of commodities
BHP shares were trading 1.6% lower by 1130 GMT, as despite record dividends, analysts said they had expected even better results.
CEO Andrew Mackenzie told reporters in London protectionism was an act of economic self-harm.
“Economically this is causing disruption and the partial unravelling of global supply chains,” Mackenzie said. “We’re not completely immune to some form of downturn and that’s why we’re nervous.”
Asked whether commodity cycles had peaked, he said he did not know, adding the company was “anxious but ready”.
Prices of iron ore, which represents nearly 50 percent of BHP’s core earnings, have fallen as the impact eases of supply disruption at the start of the year caused by a dam disaster in Brazil and extreme weather in Australia.
Trade tensions between the United States and China have also impacted market sentiment.
Mackenzie said he would stick up for the benefits of globalisation and opposed moves towards greater intervention such as removing the independence of central banks.
“The people advocating this are committing economic self-harm,” he said.
U.S. President Donald Trump has repeatedly criticised the U.S. Fed, accusing it of undermining the administration’s economic policies.
(By Barbara Lewis; Editing by David Holmes)