SEPTEMBERASIA BUSINESS OUTLOOK8Anglo-Australian mining giant BHP is making a massive investmenst in nickel, the critical material found in electric-vehicle batteries that is powering the next generation of vehicles. The group signaled the pivot earlier this month by announcing it will spend 140 million Australian dollars ($96.6 million) over two years to explore untapped troves of nickel around an existing development. "This year will be the highest annual spend for exploration in Nickel West since 2005", Jessica Farrell, asset president at BHP Nickel West said in industry conference. BHP followed up by issuing a plan to completely take over OZ Minerals, a midsize mining company specializing in copper and nickel. The proposed 8.3 billion Australian dollar deal sent shockwaves through the industry.But OZ has declined the offer, saying that it undervalued the firm. The copper and nickel assets in OZs portfolio are indispensable to the EVs that will promote decarbonization. BHP CEO Mike Henry has so far expressed unwillingness to raise the offer, despite the speculation about competing bids for OZ. "We will remain disciplined", Henry said in an Aug 16 earnings call. Behind BHPs aggressive push into nickel is the fact that the group has reached a major milestone in its years long journey of shedding fossil fuel assets. As of June, BHP has divested the entirety of its petroleum and gas operations in Australia. This year, the company completed sales of thermal coal mines in Colombia and of its controlling interest in a coking coal joint venture with Japan's Mitsui & Co. BHP is due to shutter all thermal coal mines in Australia by the end of the decade. The strong earnings as of late have given wind to BHPs sails. For the year ended June, its net profit multiplied 2.7 times to $30.9 billion. The incoming funds have helped promote investments in copper and nickel, which Henry has described as `future oriented' commodities.Nickel accounts for less than three percent of BHPs most recent revenue, so the group is training its sights on the metal in anticipation of the rise of EVs. "We expect that by 2030, around 60 percent of all car sales will be electric", Jessica said at the conference, with the share expected to rise to 90 percent in 2040. Because Nickel is used to make EV batteries, demand for the resource is projected to double or triple in the next three decades compared to the past 30 years.The pivot to nickel opens the door for BHP to lessen its exposure to the iron ore business and to Chinese sales. Iron ore contributed over 50 percent to revenue ANGLO-AUSTRALIAN MINING GIANT BHP BETS BIG ON EV-DRIVEN NICKEL BOOMNEWSROOM
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