BHP Australia president Geraldine Slattery speaks on China iron ore ban and brings out price crystal ball

BHP’s Australia boss Geraldine Slattery has said the mining giant’s relationship with China is “strong” amid a rumoured ban on the company’s iron ore and she revealed her price prediction for the vital commodity. The Irish-born mining industry veteran, who is tipped to be BHP’s next chief executive, spoke in depth about iron ore’s future, why artificial intelligence can solve Australia’s productivity crisis and even divulged her favourite WA footy team during a wide-ranging fireside chat at The West Australian’s Leadership Matters breakfast on Wednesday. Beijing ban Reports emerged two weeks ago that Beijing’s state-run iron ore buyer — China Mineral Resources Group — had asked domestic traders to temporarily stop purchasing all WA cargoes from BHP amid a pricing dispute. CMRG supposedly wants a discount on the spot cargoes it purchases from BHP and to have a larger chunk of those sales be settled in Chinese yuan instead of the US dollar. Many Australians are concerned the dispute could be a canary in the coal mine for the country’s lucrative iron ore export relationship with China, which could see lower prices for the steel input flow through to lower investor returns and government royalties. Ms Slattery told a sold-out room at Crown Perth that her company’s relationship with its Chinese customers remained “strong” and the reportedly tense negotiations were a “normal” annual event. “I wouldn’t necessarily speak to commercial negotiations, I think what I can and will say is that our relationship with China in the iron ore sector is one that goes back decades and decades,” she said. “And indeed, we’ve got decades of strong business in front of us. Commercial negotiations are a normal part of that. “They happen every year, and yes, there’s decent speculation in the press and often conflicting speculation, but I think the takeaway is we’ve got strong relationships with customers in China.” China, the world’s largest iron ore consumer, buys about 75 per cent of global seaborne iron ore and established CMRG three years ago to buy ore on behalf of its steelmakers in a bid to gain more leverage as a monopolistic buyer by keeping a lid on prices. Iron ore crystal ball Ms Slattery also dusted off her iron ore price crystal ball. Australia’s most important mineral commodity remains above $US100 a tonne despite many analysts predicting it would be beneath $US80/t by now. She implied it was highly unlikely the price would dip below $US80/t for the forseeable future. “Our view on price is we see that you’ve got a price support range of about $US80 to $US100 a tonne and we say that because there’s about 10 per cent of the overall supply stack that sits between that $US80 to $US100 a tonne cost of production,” Ms Slattery said. “So we would expect to see that (supply) to come out of the market, if you see the price drop meaningfully into that range. “If you look at the price over the last couple of years, you see that it rarely drops low, below the $US90s into the $US80s.” Don’t be Luddite or Parisian protester BHP’s key WA iron ore division has faced union headwinds since the Albanese Government began to overhaul industrial relations laws in 2023. Ms Slattery said union incursion is disrupting an industry dynamic that had worked well for decades for both employers and employees. She pointed to miners in WA being among the highest-paid blue-collar workers in the world. “Our fundamental argument is that we’re at a time where we need to invest in productivity and that that is best done where the workforce can engage directly with management.” Embracing artificial intelligence is a major answer to Australia’s productivity problem, according to Ms Slattery, with productivity levels apparently at 60-year lows. She said historical events like the Luddites attacking mechanical looms or fiery protests in Paris when Uber first started to enter the market were examples of misplaced anxiety about automation and technology. “It’s important, I think, that these attitudes that they’re not allowed to prevail and to dominate here in Australia, because we miss out on opportunities,” she said. BHP is using AI to cut the time it takes to sort through old drilling samples from hours to minutes, and Ms Slattery said the miner would harness the technological tool to make its mines of the future disturb less land and emit lower volumes of carbon dioxide. Leadership aspirations Ms Slattery is heavily rumoured to be next in line to replace BHP’s global boss Mike Henry when he steps down from the role — presumably by the end of next year. She was tight-lipped on Wednesday when asked if she harboured any ambitions for the top BHP job. After being shown a photo of Rio Tinto and BHP mining executives — including Mr Henry — in the Oval Office two months ago with US president Donald Trump, she was asked if she could see herself taking the Canadian’s spot at such events. “That picture speaks to recognition that the US is bringing to resources, Mike Henry is energised on BHP’s strategy, as indeed am I.” Honorary West Aussie BHP’s financial muscle is centred on its Pilbara iron ore mines and the Melbourne-headquartered company maintains a large corporate presence based out of Brookfield Place on St Georges Terrace. The mining giant’s strong ties to WA has made the State a key part of Ms Slattery’s life. She lived in Hillarys while serving as an operations manager in the early 2010s and said she preferred Margaret River over Rottenest as a weekend getaway destination. Her favourite AFL team in the State is the Fremantle Dockers’ AFL-W team. Ms Slattery grew up on a diary farm in Ireland and graduated from university with a physics degree. Her first job post-university was in central Europe on engineering construction projects. Her career at BHP began in 1994 after she came to Australia looking for an adventure with friends. She now oversees dozens of iron ore, copper, coal and nickel mines across WA, South Australia, NSW and Queensland.