G20 not a place to discuss climate change, says BHP chief

The chief executive of the world's largest miner, BHP Billiton, has backed Prime Minister Tony Abbott's decision to keep climate change off this year's G20 agenda, despite concerns Australia is increasingly viewed as being disengaged from the international climate debate.

In the same week that United States president Barack Obama pledged to slash carbon emissions from power plants by 30 per cent on 2005 levels, and China flagged an unprecedented absolute cap on emissions, Mr Abbott signalled he would pass on the opportunity to use Australia's leadership role as host of the G20 to focus on climate change – arguing the November summit in Brisbane was primarily an "economic meeting" to discuss matters of finance and trade.

"I don't think that's a backward step," BHP chief executive Andrew Mackenzie told reporters in Beijing, where he was attending meetings as part of a trade and business advisory panel advising the G20. "I agree with the Australian government with this. If you try and use [the G20] to solve all the problems of the world, you'll solve none. It's better to concentrate on a few things and do them really well."

Mr Mackenzie said he accepted there was a "long-term need" to have a pricing mechanism for carbon to drive the innovation that would "ultimately decarbonise the creation of energy around the world" – but insisted Labor's tax would have done more harm to the economy than good.

"That's kind of a mixed message, I accept," he said.

The BHP chief, who was also on the tail-end of a 10-day tour of China, Japan, Korea and India, which included meetings with some of the miner's largest customers, also insisted the mining giant remained an attractive long-term investment prospect for shareholders despite sharp falls in the iron ore price and persistent concerns over China's economic outlook.

Key to its Asian strategy remains the "creeping" increase of metallurgical coal and iron ore exports, but Mr Mackenzie said the miner was "much more likely to make major investments in what we feel is the next phase of China's growth in energy and food", including copper and potash – an ingredient for fertiliser.

But Mr Mackenzie was lukewarm on the prospects of uranium, despite a state-backed push to invest in nuclear energy in China.

He also downplayed the role of India as a key export market for BHP, citing its ability to fall back on its own abundant resources.

Global miners including Australia's Rio Tinto and Fortescue have banked on a sustained increase in iron ore demand from China, ramping up capacity to unprecedented levels.

But a slowdown in China's economic growth, and increasing fears of a sharp correction in its residential property market, has contributed to over-supply and concerns current depressed iron ore prices will persist.

China's top economic planning agency, the National Development and Reform Commission, warned last month that it didn't expect iron ore prices to pick up from its current two-year lows for at least another quarter.

"I don't see any reason why the price is going to turn around and shoot back up," Tim Murray of J Capital Research said. "This is not August 2012 when there was massive stimulus, sentiment turned around and everyone bought as much iron ore as they could."

Mr Mackenzie said he did not comment on "short-term trends" and said China's long-term urbanisation trend would see steel production reach 1.1 billion tonnes within the next decade.

He downplayed a recent redundancy round in Western Australia, where a reported 100 jobs were lost, saying the company constantly sought efficiencies.

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