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From challenging pandemic response to supplier challenges: BHP’s approach to METS development and future procurement

03 June 2021 | Industry NewsBBMC Events

Ms Jessica Simpson, Head of Business Partnerships BMA, addressed a sold-out Bowen Basin Mining Club luncheon in Mackay last week. Ms Simpson shared BHP’s current position while attendees also gained an inside look into the company’s strategies to ride out the global coal market variations and economic challenges, including their COVID-19 response.

“Fortune favours the brave, they say – and the outlook for our collective futures is one in which effort, enterprise and innovation will be demanded of us all. Fortunately, these skills are well developed in our industry – and we can and will hit the ground running, positioning ourselves globally as a true innovative, collaborative hub.”

BHP sees their future role in the development of the domestic METS sector as reducing hurdles to access and providing a ‘sandpit environment’ for testing, trialling and scaling potential innovations. BHP’s METS growth support Initiatives underway since June 2020 include:

$250M in procurement carve-outs for direct spend with Australian METS companies
$150M in procurement carve-outs through Tier 1 contractors for indirect spend with Australian METS companies
$20M through BHP Ventures
$20M through the Supplier Innovation Program

In partnership with Austmine, the Supplier Innovation program gives BHP an “avenue to seek solutions to issues or challenges identified at our operations that don’t necessarily have an immediate off-the-shelf solution”, explained Ms Simpson. Challenges are opened to the marketplace to produce solutions that deliver clear value against improved safety, reduced cost, and improved productivity and environmental performance.

Unlike traditional procurement processes, the Supplier Innovation Program is designed to move quickly through the EOI, pitch and proposal stages to a paid pilot for on-site trials. Successful projects gain the opportunity to permanently implement the solution under a contract. And most importantly, the vendor retains the intellectual property for further market engagement.

To date, the program has seven challenges in various stages of resolution, with a commitment to developing 20 more in the next financial year, and 30 challenges in the following year.

BHP’s ‘Charge On Innovation Challenge’

Launched this month, using the same approach as the Supplier Innovation Program, but on a global level, BHP is crowd-sourcing emissions reduction from their diesel-powered haul truck fleets. In support of the global zero emissions material movement initiative, BHP, with Rio Tinto and Vale, are searching for technology to both electrify and maintain charge on the fleet which runs 24/7.

The challenge has already sparked global interest, with opportunities to leverage the experience and innovation in the automotive, battery makers, aerospace, defence and other sectors. Ms Simpson acknowledged the solutions won’t be implemented ‘overnight’ but a rich stream of ideas may be able to be applied quickly and directly, while others may lead to longer-term design concepts.

Local Buying Program Update

Ms Simpson also provided an insight into the success of the BHP and C-Res partnership over the last nine years, which started in the Bowen Basin and is now implemented across Australia. Since 2012, BHP has spent more than $600M with over 1,450 local and Indigenous small businesses, with a percentage of this channelled through the Local Buying Foundation. Funds are used to open up local business development and build sustainable business communities.

Recognising our most valuable resource

Acknowledging the long and proud history of the Bowen Basin communities, Ms Simpson reflected,

“It’s somewhat ironic that a region with such incredible natural resources would find its most valuable resource was its residents. Our future as a region is one that we will imagine, plan, construct and deliver together.”

Registrations for the next event, held in Mackay in July and featuring a guest speaker from Bowen Coking Coal, will open in the next few weeks.