BHP chief commercial officer, Arnoud Balhuizen, has given a buoyant outlook on Asian demand, saying it looks like Mr Modi will be re-elected in 2019 and that China’s One Belt, One Road plan to branch out globally will foster 150 million tonnes of steel demand.
Mr Balhuizen said the Modi government’s plans for 100 per cent electrification by 2020 and “housing for all” should spark increased commodities demand.
“the Indian economy is set to grow at the upper end of expectations under the policies of Prime Minister Narendra Modi, boding well for commodities demand”.
“There are reasons to be getting very, very excited,” he told a Melbourne Mining Club lunch yesterday. “These policies are expected to have a material impact on demand for coal, iron ore, copper and petroleum.”
He said a landslide March election win by Mr Modi’s party in the critical state of Uttar Pradesh boded well for a win in the 2019 election. “It is safe to assume Premier Modi will be in office for another term. So that stable political framework and successful reform he had on land and GST gives us a strong base for growth,” Mr Balhuizen said.
“With the positive signposts, especially in India, we are confident that we are probably in the upper end of the range (of BHP commodities demand forecasts).”
BHP expects One Belt, One Road to trigger huge demand for resources, services and technology.
“It is exciting. A lot of our suppliers in China are opening up branches along the road,” Mr Balhuizen said.
“We see around 150 million tonnes of additional steel demand on the back of One Belt, One Road initiatives. On the back of that there will be economic development that will trigger copper and energy demand.”
Queensland’s coal sector in the Bowen Basin is the beneficiary on this occasion, with the BHP Billiton Mitsubishi Alliance (BMA) offering hundreds of jobs in the region.
According to the Queensland Resources Council (QRC), the job opportunities are another sign of the green shoots returning to the coal industry, with more than 200 people expected to be engaged for employment at the mines.
QRC chief executive Ian Macfarlane said it was great news for people in Queensland’s north and the broader coal sector in the state, which had been struggling through a downturn over the past few years.
“This is another sign of green shoots for the Bowen Basin, an area which delivered much of the $1.6 billion boost to royalties for the state government,” Macfarlane, the former federal resources minister, said.
“It follows on from the good news we are seeing right across the Queensland coal industry with record exports last year and new mines opening up.”