BHP Develops Own COVID-19 Tracing App
In its latest operational update for the nine months ending 31 March 2020, BHP Limited continues to find itself in a strong position. As of 31 December 2019, the firm’s financial position sees net debt coming in at US$12.8 billion, emerging at the lower end of its target range. Additionally, the firm also holds US$14.3 billion in cash and its equivalents, further reflecting the resilience of the business backed by low-cost operations.
Unlike other firms, BHP has a competitive edge as it can continue employing its staff, make regular payments to suppliers and deliver products to consumers. Suppliers have also received accelerated payments and funds have been established to help support regional and indigenous communities. Consequently, production guidance for the 2020 financial year remains unchanged for iron ore, petroleum, and metallurgical coal. BHP is also going ahead with growth opportunities where US$11.4 million has been allocated to the completion of six notable projects across petroleum, iron core, copper, and potash.
Amid the COVID-19 pandemic, BHP has come up with an app for tracking the movement of its staff. Despite the easing of restrictions in several states within Australia, the firm expects to continue putting in place virus precautions at its workplaces for some time. Known as C-19 Tracer, the app represents the joint effort of BHP’s technology and health & safety departments. The app will be rolled out for the first time this week. Specifically, BHP’s Chilean copper division has been identified as the ideal location for the launch.
This is because the specific location has witnessed higher infection rates relative to its Australian staff. Ultimately, should the trial be successful, the app would be used in other parts of the world BHP operates in. Like Australia’s COVIDSafe app, C-19 Tracer allows the tracking of movements of staff who have tested positive to the virus. Doing so will enable BHP to take precautionary measures swiftly and sterilise affected work sites.
The COVID-19 pandemic has delivered a massive blow to commodity prices and further threatens to push the global economy into a recession. Within the sector, this has consequently witnessed major mining companies slashing back on expenditure and delaying projects. However, BHP Chief Executive Mike Henry asserted that the firm’s capital allocation framework, which was introduced in 2016, can clearly identify the most effective way of allocating spending across the group.
More notably, the results of this strategy have allowed the firm to deliver high-quality returns over the years. Thus, aside to cutting back on expenditure, BHP will continue to stick on this spending strategy. Speaking at the Bank of America Global Metals, Mining and Steel conference, Mr Henry was of the view that a V-shaped recovery from the COVID-19 pandemic is now less likely to occur. Nevertheless, the firm remains in a strong position to cope with further cuts in a bid to preserve cash.
By Caroline Wong
Click here for a 7 days access to our Lotus Blue Portal.