Welcome to BHP's online information session for shareholders. I'm Gabrielle Notley, and I'm joined here today by Mike Henry, our Chief Executive Officer, Geraldine Slattery, President of our Australian Operations, and David Lamont, our Chief Financial Officer. Thank you all for joining. Well, the first half of the 2023 financial year has been very busy for BHP. We've made further progress on our strategic priorities. This has been at a time where there's been a lot of volatility in the share markets, in commodity markets, and around the world. Of course, we've just recently announced our half-year results and dividend. We've got lots to talk about today. Shareholders have sent in some great questions about our recent performance and are also interested in where the company is going.
Before we do go to those, I know, Mike, you were keen to talk about safety, and I do have a question for you on this. It's from a shareholder who has written following the tragic loss of a colleague in our operations last month. The question is from David, and he asks, "I was concerned to learn of the fatality at Port Hedland in February. I appreciate the huge amount of work BHP has historically done and continues to do to make operations safe and healthy. However, I would like to challenge the words of the Chief Executive Officer when he said, 'At BHP, delivering safely is our number one priority.' I was reminded of a talk given by Helen Fitzroy, who lost her husband in a mining accident in 1991.
She said how much she dislikes the phrase as it implies that safety can be traded, priorities can shift. We all know words matter and their meanings matter, especially from the CEO. My question is, will safety ever be spoken about as a fundamental value at BHP rather than one of just a number of competing priorities, albeit the most important one? Mike.
Okay. Gab, look, thank you, David for asking the question. I might just start by for those shareholders who aren't aware of what's happened. We have had such a focus on making BHP a safe place to work. After four years of being fatality-free across BHP, we tragically did lose a colleague in our Port Hedland rail operations last month, Jody Byrne. Jody leaves behind wife, children, grandchildren, many friends and colleagues. It is a real tragedy, and we're providing what support we can.
Of course, we have an investigation kicked off and, you know, once the conclusions of that investigation are reached, the learnings will be very rigorously implemented across the company and shared widely, including with others in industry, so others can also learn and use that to help make themselves safer as well. The point that David calls out on wording, look, it's a great call-out in that words do matter. And of course, safety is a value for the company. In fact, it's the lead-in to the words associated with our first value of sustainability. First value that the company is set out in the company charter is sustainability, and it starts off with putting health and safety first.
When I talk about the priority that we place on safety, I'm trying to articulate exactly what David is calling out. And it's by no means something that can be traded off against other priorities. If that's not the way that my words are being heard, then I'll reflect on how I can better articulate the intent, which is exactly as David calls out. This is core to our being. It has to be part of the BHP DNA. It's not a trade-off of this or that. It's safety day in and day out before we then pay attention to anything else.
Thanks very much, Mike. There were a number of questions about the performance in the half, which there has been media coverage about. Maybe if I could ask you to give a quick overview of how you saw the half in BHP's performance.
Sure. The underlying businesses performed quite well thanks to the work of Geraldine and Rag and all of the business leaders below as well as the others around BHP. Production across all of our major businesses was up period on period. That includes iron ore, copper, BMA. We are seeing a bit of the inflation bite come through in underlying cost. Thanks to the real focus on discipline management of costs and the way that we've set ourselves up as a business, including with the globalized procurement function that sits under Vandita, we have managed to do a better job than most in containing costs. Some inflation coming through. We had flagged that previously.
The team's doing a pretty good job of keeping a relative lid on costs. Delivering reliably operationally. Strategically as well, continuing to deliver, building out the growth options that we have across the company, continuing to make good progress on the Jansen Stage one project. Of course, we have an offer out there currently for OZ Minerals, and we may speak a little bit more about that later. This underlying strong operational performance, coupled with, you know, an environment of still pretty healthy commodity prices, allowed us to declare a $0.90 per share dividend this time around. That's roughly $4.6 billion.
That comes on top of the over $7 billion in taxes and royalties paid for the period, the significant spend that we have with Indigenous businesses. From memory, it was about $140 million during the period. $40 million to social programs and initiatives across the business. The contribution that we're able to make back to shareholders, to governments in the form of royalties and taxes, and to other stakeholders, is quite significant. Again, it all relies upon the solid delivery of operational outcomes coupled with strong markets for the commodities that we operate in.
Thanks, Mike. We do have a question on the dividend actually. David, I might direct that to you. There's a couple. Emilio asks, "What is your dividend policy, generally speaking?" Another question from Arthur, "Is the dividend paid net or gross?
Look, great questions. Thanks Gab, for those. Let me start by saying we think about our dividend in the context of our Capital Allocation Framework. The Capital Allocation Framework was put in place in 2016, and it helps us to decide how much of the cash that we generated do we reinvest back into the business to sustain the operations, but also look for growth, how much we put to the balance sheet to shore up the strength of our balance sheet, and also how we return money back to shareholders. Since the framework has been put in place, we've returned on average around about 74% as the payout ratio for dividends. Mike referenced earlier the $0.90 U.S. per share for the interim dividend, and that was at 69% payout ratio.
We constantly look at how do we pay to shareholders above the minimum, which we have said through the Capital Allocation Framework of 50%. We determine that with the directors on a half-yearly basis, looking at the underlying performance of the business, the best way to actually utilize the cash that's been generated. We have had a history of therefore paying money back out to shareholders. The interim dividend will be paid on the thirtieth of March. For the Australian shareholders, that'll be AUD 1.36 per share, and that will be the gross amount that shareholders will receive. If you're an Australian shareholder and you qualify, you'll also get the franking credit to offset the tax paid on that gross dividend. That represents the tax that we've paid in Australia on the earnings that we've delivered.
That way there is a mitigation against individuals' tax payments. That references the significant amount of taxes that we actually pay here in Australia.
Thanks very much, David. Sticking in Australia, I might direct this question to you, Geraldine. It's a question from Sophie, who asks about the impact of coal price caps on BHP's business and profits, and does that impact the way you're thinking about the future of BHP producing coal in New South Wales?
Thanks, Sophie. Very relevant question. Look, let me talk about that from a number of perspectives. Firstly, the New South Wales directive on supplying coal into the domestic market at a capped price was quite disruptive to the operation. The New South Wales mine provides, our mine provides directly to the exclusively to the export market. There were some logistical and commercial matters that we're working through to comply with those directives and supply coal to the power generating assets in New South Wales. That's something that we've had to take on, change our mine plans, and work through those arrangements.
Probably the broader issue I'd call out, though, is the concern we have on market interventions such as what we've seen in New South Wales, but equally what we've seen in Queensland, where the state government increased the royalties to the maximum highest globally. What you have then is a market intervention that's both quite suddenly applied, and equally calls into question for investors, the stability of the terms under which we make future investment. It starts to threaten the ability of companies, including ourselves, we've been transparent about this, to continue to invest, particularly in Queensland. Look, maybe I'll say finally, why is this important?
Ultimately, the mining sector in Australia, its competitiveness relative to our global peers is incredibly important because all of the returns that come from those investments, including what we've talked about here for the half, go right back into the Australian economy, to communities, to governments, to employees, to partners, and to shareholders.
Sorry, Gab, maybe if I can just build on what Geraldine said, because I think she's made a great call-out here. None of the money that comes into BHP, right at the end of the day, everything that comes into BHP actually ultimately gets distributed. I spoke earlier to what's being paid in taxes and royalties and so on. The other thing that I think many public, many out there in the public don't understand is that about 70%, 70% of Australians, so we're looking at 17 million+ Australians, actually hold shares in BHP, either directly or through their superannuation funds. BHP makes up roughly 10% of the ASX. On average, we're gonna find that circa 10% of retirement savings are BHP shares.
That then goes to the importance of the health of a company like BHP and the broader mining sector, because not only is it contributing to the economy today, it's contributing to the wellbeing and income of 17 million Australians in future. We've all got a shared interest in the sector. Other, perhaps the other stat I'd just throw out there is we, you know, we've paid about 10% of all corporate tax in Australia in the course of the past year. It's in all of our interest that the sector and that the company remain competitive, able to compete globally. Market, you know, the market interventions and the sudden royalty increases and the co-one in Queensland was particularly egregious.
These things, you know, certainly don't help the investment case for Queensland and will, you know, hurt the bottom line.
Thanks very much, Mike. Perhaps, following on a little from that is, some of the commitments that the company has made, generally around its social value that it contributes. There's a particular question from Joshua, who does ask could he get an update on BHP's progress on gender balance in the workforce, and also on Indigenous employment.
So
Maybe I should pass on to you.
I'll take that one. I'll take that one.
Yeah.
I'm quite passionate about it. It is set out in our social value framework. The social value framework that we announced last year talks to these two issues. I would just call out that it's, yes, it's a contribution that the company makes back to the society around it. These things support underlying business performance as well. You know, since the time that we put in place our aspirational goal to be a gender balance company by 2025, we put that goal in place back in 2016. We've roughly doubled the percentage of the workforce that's comprised of by women. It's now over 33%.
It should be no surprise that as we've achieved that, as we've brought new thinking into the company, as we've shifted culture, which comes hand in glove with that, we've seen improved underlying business performance as well, both on the safety front and on the productivity front. This is, you know, BHP making a significant contribution back into the society around us, and at the same time, doing so in a way that helps lift underlying business performance and long-term shareholder value. The same thing can be said on the Indigenous employment front, where we continue to increase the proportion of the workforce made up by Indigenous, and it varies a little bit by region. Making strong inroads there.
In addition to that, we're increasing spend with Indigenous-owned and operated businesses, again, right around the world. That includes recently in our Western Australian iron ore operations, where we've put in place an arrangement with a Banjima-owned and operated company to operate one of the semi-mobile crushers that we have in our business. There's these success stories that for the company, success stories for what we're contributing back to society. In the case of Indigenous businesses, where we're helping to, you know, through the opportunities that BHP is able to create with Indigenous businesses, we're actually supporting long-term business outcomes and business growth.
Thanks, Mike. You mentioned in your first response, OZ Minerals. We do have a couple of questions from shareholders on our offer. This from Anthony: Can you let me know what are the synergies and cost savings from the takeover of OZ Minerals, in particular, the synergies between Olympic Dam and Prominent Hill? Also, is BHP looking to expand its gold operations? I suspect this is from a South Australian shareholder. Perhaps I'll start with you, Mike, on that as well.
Why don't I provide some high-level comments, Gab? Geraldine, I might pass to you for some of the detail. Where's the process at? The OZ Minerals board has provided their unanimous recommendation that shareholders approve the deal. Independent expert has now come out, that's included in the scheme booklet that OZ has now issued. The independent expert also has concluded that this is in the interest of shareholders. This will go to a vote mid-April. Assuming the vote gets up, implementation would be at the beginning of May.
Now, as to the question of synergies, I'm sure you'll have a few words on that, Geraldine, but I would just call out there's still a lot of kind of technical work and detailed work that will need to be undertaken to fully unlock what we see as an attractive opportunity for synergies and growth over the long term. There will be synergies between the groups of assets. OZ Minerals, as most shareholders would know, is in particularly in copper and nickel, two of the commodities that we've indicated are important for BHP's future. There will be some further work to look at exactly how we bring the assets together and unlock long-term synergies. Geraldine?
Look, thanks, Anthony, for the question. If you are a South Australian, I think you've got every reason to be excited. If I take the success case outcome here, you know, where the synergies come from is that combination of expertise, capability, as well as, of course, the assets that have such complementarity between them, and that each company in its own right could not create what can be created by bringing those together. It's both the capabilities and the asset base that we think ultimately will build a South Australian basin. Maybe just a couple on the specifics, notwithstanding, as Mike said, there's a lot of technical and planning detail that needs to be worked through.
Part of what we're already looking at, and we'll expand our thinking, of course, with the the OZ Minerals mines in Carrapateena and Prominent Hill, is looking at the smelter capacity and its alignment with the mineralogy of Olympic Dam, our own exploration success in Oak Dam, and then the two OZ Minerals assets in addition to that. That's a key part of the expansion and the technical work that we'll be looking at. Now, quite aside from what happens at the mine, there's a lot of work that will happen in close consultation with our communities, with the Indigenous peoples in the region and with government to solve broader issues that underpin the South Australian basin concept, including water.
All of this is ahead of us, and yeah, very much looking forward to it.
Thanks, Geraldine. I now will move to potash, and I'll might ask you these questions, Mike. We have a couple, one from Sal, who asks, "I, among many others, I'm sure, applaud BHP for pursuing the Jansen Potash Project in Canada. How confident is BHP in the project? That it will play a significant part in aiding global food security for decades to come." A separate question, Mike, from Steven, who says, "How do you view the future of fertilizers within the BHP portfolio? Are you looking to acquire a bigger stake, and can you update us on the Jansen Project in Canada?
Okay. Well, look, Jansen and potash are definitely something shareholders should be interested in because this is going to be a big part of BHP's future. It's. I might start, Gab, with why we like potash before I come back to the specific project. There's three main fertilizers out there that are needed for global food production. You have nitrates, phosphates and potassium or potash. It's one of the three main fertilizers, essential for global agricultural production. In a world where the global population is continuing to grow, where there's pressures on arable land, including because of climate change, but even outside of the pressures on arable land, there's a need to conduct agriculture or farming in a more sustainable fashion going forward.
The balanced application of nutrients is going to help with that. These things coming together, growing population, improving diets, which tend to be more calorie-intensive as well, coupled with the need for more overall more sustainable agricultural production, are going to drive strong continued growth and demand for fertilizers and we believe in particular for potash. Against that backdrop then, where are the world's best greenfield undeveloped potash resources? It's in Saskatchewan, in Canada, and sitting under BHP's wing now. Jansen is the first amongst them. This has been a long time in the making. Back in the second half of calendar year 2021, we made the final investment decision and the project remains on track.
Still a few years to go before we get first production. We've recently indicated first production in 2026. That's earlier than we had originally spoken about, which was 2027. You know, with everything that's happened in the period since, which has highlighted some of the security of supply challenges in that commodity with the tragedy that's played out in the Ukraine and the impact that that's had on potash supply from a competing region. I think that bolsters the case for the importance of this project to global food security for decades to come. Of course, Jansen's was never about just Jansen Stage 1 , or our potash ambitions aren't just about Jansen Stage 1 .
There's successive stages here, Jansen Stage 2 , Jansen Stage 3, Jansen Stage 4, which over time will make this a, quite a material business for BHP or have the potential to be a material business for BHP. For the time being, as we continue to execute Jansen Stage 1, we've also accelerated the studies into Jansen Stage 2, and we'll have those studies completed now in financial year 2024, a year earlier than originally planned. That will give us the option then to be able to grow the potash business more quickly if market circumstances warrant, and of course, if we continue to execute everything according to plan on Jansen Stage 1.
Thank you. Thank you for that update. I'm going to move to much more in the near term. Some shareholders have been interested in the economic conditions that the company's been operating in, particularly this last period. David, I might direct this question to you. It's from Laura. She says, "Many companies are mentioning higher costs as big factors as part of their results reporting. How is BHP managing these factors, and should we expect inflation to continue?
Yeah. Thanks for the question, Laura. Let me start by saying we aren't immune from the inflationary aspects that are playing out across the globe. Certainly, we are seeing some lag effect of that. If I was to draw attention to one area, as a bit of a focus, our raw materials is one of the key parts to our cash costs. Diesel period on period was up some 70%. That actually meant from our overall cost base, it's gone from what was around about 5% of our cash costs to about 8% of our cash costs. On the back of that, what we're needing to do is constantly look at how do we run the operations efficiently and effectively. The adoption of the BHP Operating System is one way that we actually mitigate some of those.
We look at taking out waste where we see things. We look to prioritize our activities on the things that are critical to the ongoing operations. Now, as I said, we aren't immune from that, and there is certainly some lag effects coming through. If you look at things like diesel, we think that we've seen the peak of that. Equally, if you look at inflationary pressures across the globe, we are starting to see some peaks behind us, and we think that certainly in the second half we should get some relief on some of those aspects. Having said that, if you look at our performance versus others in this sector, we continue to perform extremely well. If you look at our Western Australian iron ore operation, we are the lowest cost iron ore producer globally.
If you look at how we actually performed in both our BMA assets and also at Escondida, we saw that the differential versus us and our competitors grew. We're not immune. We need to continue to focus on what we can control in that regard, and the adoption of things like the BHP Operating System is putting us in good stead.
Thanks, David. Now a question around the labor market. Geraldine, I'll ask this of you. The question is: With the Australian labor market as tight as it is, how confident are you that you can find enough qualified workers without overpaying for them?
Yeah, that's an excellent question. Maybe just to build from what David was calling out there. Our people and our labor force are both availability, capability, and cost basis is incredibly important to being safe and being productive. We're an organization of some 50,000 people in Australia. The vast majority, of course, are in regional communities and in remote operations. Equally, it constitutes about some 40% of our cost basis in the operation. Now, we have seen pressure in the labor market, both in terms of availability, and that shows up with higher turnover, and it shows up in just difficulty accessing the skills and trades that we need, particularly so with frontline workers, so production operators, maintenance operators, haul truck drivers, et cetera. What are we doing about it?
Look, I'll talk to two parts. One is internally. At the end, afterwards, I'll maybe talk about the policy environment. Internally, focusing on our people has always been a big priority for us. We continually to increase the number of BHP direct employees. We've increased that over up to 30,000 of our 50,000 people are now direct employees, and we believe we offer, you know, quite a competitive reward proposition, but also a culture, as both Mike and David have spoken about, that is a place people want to be from an inclusivity perspective, but also from a career development perspective.
With respect to frontline workers, we've invested over the past couple of years and going forward in training academies, what we call the FutureFit Academies, in Western Australia and in Queensland, where we're developing 2,500 frontline workers and apprentices over the five-year period at an investment of some $300 million. As an aside, actually, I was in Mackay just yesterday for a graduation ceremony, and, yeah, it's, you know, it's a really rewarding event to be a part of. Maybe as well as what we do internally, we also work with the Commonwealth Government externally to inform labor market policies, industrial relations policies.
Look, I'll call out one that's under consideration at the moment, Same Job, Same Pay, which we are working through industry associations, BCA, MC, and our peers, to seek to influence that piece of that policy, to minimize its effect on the mining sector. The mining sector enjoys some of the highest wages actually in Australia, and we certainly support the government's objective in seeking to protect low-paid workers, as the legislation is designed to intend. We don't think, however, that that is relevant to the mining sector, as one of the highest paid sectors. Again, back to maybe a point I made earlier, staying competitive, for the resources sector in Australia, whether it's labor costs or royalties, just incredibly important for the nation as a whole.
That's why we focus so strongly on our labor availability and cost.
Thank you. One of our shareholders has actually asked a somewhat related question around some of the portfolio changes that we announced just recently. Let me read this question from Anthony, who says, "What is the thinking behind the divestment of Daunia and Blackwater while other companies are reporting huge profits on off the back of their coal assets?" A second one that is from Eleanor, who says, who asks whether coal royalties were part of the motivation for that decision, and whether positions will be made available at other BHP mines for any employees from Daunia and Blackwater who want to remain with BHP.
Thank you, Anthony and Eleanor. We did announce at the half year with our joint venture partner, Mitsubishi, on the divestment of Daunia and Blackwater, and we're progressing that. Look, certainly we've seen high prices, and we ourselves, of course, have seen that in our results. Our decision is a strategic decision that goes beyond any one year in terms of prices. It's fundamentally based on seeking to high grade our metallurgical coal portfolio to those assets that we believe are best positioned, in terms of what the steel market will be looking for, and particularly around decarbonization.
We know that our customers will continually seek to optimize their coking coal supply relative to its CO2 potential, and Daunia and Blackwater are at the lower end of the quality spectrum. Now they're still great assets, but we think they certainly have a place in the future of the industry, just not necessarily competing within the BHP portfolio. To Eleanor's question on the royalties, look, fundamentally, it was a strategic decision. What I will say, though, is that the royalties certainly call into question the competitiveness of investing in Queensland. Not the direct driver, but certainly is just another overlay on the competitiveness of those assets.
Maybe finally, to pick up on Eleanor's question, in terms of the divestment, we do see these as strong assets, whilst we don't see a case whereby we would close the assets. We will continue to work, with, in sharing the process and the progress with our employee base and with shareholders.
Thank you. I might take a step back now. This is a question in relation to some national issues that are being discussed in Australia. This is a question on the Voice. It comes from Derrick. Mike, I might ask you to respond to this one. He asks, "I understand BHP some months ago expressed a view broadly in favor of the Voice constitutional amendment. In light of legal complications and many unknowns of the detail now being raised in the media as more information of the proposal becomes available, are you still of that same view? Perhaps BHP should adopt a more neutral position on what is becoming a very divisive political issue. The constitutional amendment will be decided by a vote by Australian citizens, not companies, financial institutions or boards." Mike, over to you.
I might start my response with the back end of the question or the point that was made. Yes, you know, at the end of the day, this will be a referendum and decided by the Australian people, and it's not for the companies to, you know, obviously to direct the employees or others how to vote. Having said that, I do think it's appropriate, particularly for something like this, where the partnership and the relationship that we have with First Nations and indigenous people globally, but, you know, including here in Australia, is just so fundamental to the company. Everywhere BHP operates, we operate on or close to the lands of First Nations peoples. Here in Australia, we have traditional owners associated with all of our operations.
Against that backdrop of the importance and the special nature of the relationship between the resources sector and Indigenous peoples and BHP and Indigenous peoples, that we have been longstanding supporters of reconciliation between Indigenous and non-Indigenous Australians or Australia. Back in 2019, after a process of engagement with Traditional Owners, with employees, with other Indigenous and Aboriginal and Torres Strait Islander leaders across Australia, we came out in support of the Uluru Statement from the Heart, inclusive of the call for Voice. We maintain that support.
In the period since, we've continued to engage internally and externally to ensure that our understanding of the topic is current, and to appropriately calibrate the contribution that we can make to this in terms of the public discourse and that position remains. The other point I would note is that, of course, our efforts in respect of reconciliation go well beyond support for the Uluru Statement and Voice. We're Australia's largest resources sector employee of Indigenous Australians. We're an increasingly big business partner to Indigenous businesses across Australia, and then the same can be said for the other regions that BHP operates in.
Geraldine, is it something that's of conversation at the operations?
It is. I guess it's not unexpected that a question and a debate of such national significance wouldn't attract questions and debate. We recognize that, and part of what we'll be doing internally and more broadly is providing space for that debate and that conversation. Giving people access to the background and the thinking on the debate and allowing that to happen in a respectful and inclusive way. As Mike's already said, of course, it is a referendum. It's for each person to come to their own conclusion and not for the company to, in any way, seek to influence or direct that.
However, given our footprint, both with our communities, and employee base, it's important that we provide that opportunity and recognize that it is a question that people will have many views on and people need to have the opportunity to express those.
Thank you, Geraldine. Now onto a couple of questions around battery metals. Mike, I'll ask you to take these. Jeffrey asks, "Are you considering any new mergers and acquisitions in lithium, especially with the uptake of electric vehicles?" Sal separately asks, "Is BHP actively pursuing a lithium project strategy?
What kind of an exciting space, battery minerals. Of course, they're making a critical contribution to the world's ability to mitigate climate change and to keep the world at no more than 1.5 degrees. You know, the electric vehicle space, along with the broader electrification of the economy, is going to be absolutely essential. Now, we as BHP, of course, need to be deliberate about the roles that we choose to take up in helping to meet that need for electrification. If I talk specifically about lithium is a commodity where we've said, you know, we're broadly aligned with others. We think that there's going to be strong growth and demand for lithium for electric vehicles, but it's not a commodity for BHP.
Instead, we're choosing to prioritize copper, and I'll come back to why in a second. In the case of lithium, whilst we see the demand outlook being strong, that's not enough to make it a BHP commodity. There has to be sufficient scale in the industry for it to be a needle mover for BHP. It has to afford the opportunity through the shape of the cost curve. The difference between the high-cost players and the low-cost players to generate attractive margins over time. We have to be able to secure big, long life assets, which are the sorts of assets that BHP is good at operating, and it has to be aligned with our capabilities.
There's a number of dimensions in there that, for lithium, that don't quite match up with those requirements from a BHP perspective. In the case of copper, it's a bigger industry, both now and in the future. The underlying assets can be at quite large scale, as we see with likes of Escondida, Spence, and Olympic Dam, wholly aligned with BHP's capabilities. This is something we've been doing for decades now. The cost curves, because of the difference in grade and so on, we believe that it's going to afford better margin potential for the company over over time. We've elected to prioritize copper, but of course, nickel as well. If we come back to the thematic of electric vehicles.
Electric vehicles, yes, they use lithium. They actually use a lot more nickel. We believe that that nickel demand for electric vehicle batteries and batteries more broadly is going to be pretty durable. Nickel is really important for highly high energy density batteries. We have the world's second largest nickel sulfide resource. We've got the world's largest copper resource, world's second-largest nickel sulfide resource. We have a great set of infrastructure in place in Nickel West and Western Australia. We've moved a little bit further downstream in terms of the battery raw materials production supply chain in that we've stood up our first nickel sulfate plant.
We've gone from just producing nickel to now producing nickel sulfate, which then goes into battery precursor, which goes into battery manufacturing. Is BHP going to be a battery manufacturer? Coming back to the other half of the question, no, because that's not within BHP's capability set. Certainly, the mining of the resource, a degree of processing around the metal, both for copper and nickel, is aligned with what we're good at. Two commodities along with potash then which are going to underpin future growth for the company and our ability to continue to grow value for shareholders and other stakeholders.
Perhaps I'll ask about another commodity, hydrogen. Maybe Geraldine, I'll push this one to you. It's from Gordon. He says, "Does BHP have any current or near-term interest in hydrogen investments in Australia?
Thanks, Gordon. Look, you'll have heard from Mike just then in terms of the process by which we think about what commodities fit best in our portfolio and our strategy, which, you know, fundamentally speaks to our capabilities and how we see the demand, the supply-demand balance. Predominantly from a capabilities perspective, we don't think that hydrogen is a commodity that best matches our capabilities first and foremost. We don't have a competitive advantage there, so likely we'll look to others in the advancement of the hydrogen industry. We are still very interested and keep a keen eye on hydrogen as a commodity in development from a number of perspectivesd
Within our own operations, we continue to electrify our operations with renewable sources. There are opportunities and cases within our own operations where direct electrification doesn't make sense, and hydrogen may be a better alternative. Most significantly, we are interested in hydrogen in terms of its potential to decarbonize steelmaking. Steelmaking at the moment, of course, is dominated by high-quality coking coal, which we provide from our Queensland assets. Over time, there are various technologies, including hydrogen, but equally others that show promise of decarbonizing. Having said that, we do think that hydrogen as a decarbonizing technology with application in steelmaking, we do think that's some decades off at scale.
We are very, have conviction on metallurgical coal, having a very commanding presence in steel making for decades to come.
Thank you, Geraldine. We are just about out of time. I think you would all agree that our shareholders have taken you around the world in the near term and our prospects, but also into the long term and some of the exciting things that you have planned ahead for us and our shareholders. Maybe Mike, I'll finish with you if there's anything that you would like to leave shareholders with.
Well, look, let me come back to where we started the conversation, Gab, on safety. This is, you know, a fundamental value for the company. It's something that everybody sitting up here, David, Geraldine, myself, the rest of the ELT and the BHP board, takes incredibly seriously. Off the back of the tragic loss of life that occurred last month, we are doubling down, tripling down, you know, finding new ways and to further strengthen the focus that we have on this and our underlying safety performance. The company is performing well.
This underlying focus through the BHP Operating System and the way that we've set ourselves up, focus on continuous improvement year in and year out, eking out that little bit of incremental performance across the business. Coupled then with such a strong approach to social value and enduring commitment to that, together with our disciplined approach to capital allocation, and David referenced the Capital Allocation Framework earlier. All of that brought together with this very clear plan on how we're going to grow company across the commodities of potash, copper, and nickel, whilst continuing to grow shareholder value in our iron ore and metallurgical coal businesses, I think provides a pretty compelling proposition for shareholders.
All the commodities that we now have in our portfolio stand to see upside in a growing global economy and faster decarbonizing world. We've increasingly have the portfolio that we're seeking to support long-term shareholder value growth, and we've coupled that with this strong approach to operations and strong approach to social value as well.
Thanks, Mike. Thank you to all of you who joined us for the discussion and for your ongoing interest and support, particularly at a time when mining and minerals are very topical for investors and there's a lot of questions around. We look forward to speaking with you all again soon.