Mike Henry, chief executive of the BHP group, was “cautiously optimistic” on Friday about China’s economic prospects, despite the uncertainty.
“There is uncertainty in China, although our view is that China is going to continue to provide a little bit of stability or underpinning to global economic growth in the next 12 months,” the head of the world’s largest listed mining company said in a pre-recorded interview on Monday. FT Mining Summit in London.
China, the world’s second largest economy, accounts for more than 50% of global demand for raw materials. Its economic prospects have been clouded by tight COVID-19 restrictions, disruptions to energy and food supplies caused by the Ukraine crisis, and slowing global growth due to sharp rises in borrowing costs for curb rising inflation.
The International Monetary Fund expects China’s GDP to grow just 3.2% this year, down from 8.1% growth in 2021.
BHP is one of the world’s leading producers of iron ore, used to make steel for the construction industry, with more than 250 million tonnes mined in the fiscal year to June.
“We forecast that China’s steel production is likely to see another year of over a billion tonnes, down slightly 1-2% from last year, then pick up next year by around 1%, as that would be the fifth year in a row of more than a billion tons of steel production,” Henry said.
The mining giant is currently studying whether it can increase iron ore productivity above 300m tonnes/year, Henry added.