BHP Partners With BYD’s FinDreams For Mine Electrification – BYD (OTC:BYDDF), BHP Group (NYSE:BHP)

A leading global miner, BHP BHP, has signed a Memorandum of Understanding (MoU) with FinDreams Battery Co., a subsidiary of the Chinese EV and battery manufacturer BYD Group BYDDF.

The partnership, announced today, will help the electrification of BHP’s operations. The two parties will work on innovative battery-powered solutions for heavy mining machinery, light vehicle fleets, and the essential charging infrastructure, all aimed at helping BHP achieve its goal of lowering carbon emissions.

«This relationship is a further step towards BHP meeting our decarbonisation ambitions for our operations and helping to drive transformative change within the global resources industry,» said Rashpal Bhatti, BHP’s Group Procurement Officer. «BYD is at the cutting edge of battery innovation, and by working together, we can help shape a more productive and sustainable future for mining.»

The partnership will help BHP achieve its long-term net-zero operational emission target by 2050, as well as its medium-term goal of reducing emissions by at least 30% (compared to 2020) by 2030. Electrification is a lucrative proposal for miners since fossil fuel price volatility can notably influence their cost of operations. However, this shift brings along challenges in energy and infrastructure.

McKinsey‘s research estimates that electrifying the mobile fleet in the global iron ore sector alone could lead to a surge in electricity demand by 20 to 30 terawatt-hours, more than doubling consumption at many sites, driving significant capital investments.  Per their estimates, the power infrastructure for just the iron ore mining industry could cost anywhere from $30 to $45 billion. Mines would have to upgrade grid connections, install substations, and expand renewable energy generation.

Yet, not everything falls within the mining industry’s control. The technological development of batteries will play an important role in this endeavor. To support intensive use in mining operations, batteries need to be of larger scale, with higher density and faster charge rate – else the industry risks compromising productivity.

BHP’s rival Fortescue Metals provided some orientation with their large-scale electrification effort in 2024. A $2.8 billion order was for 475 zero-emission machines, including 360 battery-electric haul trucks. Despite its ambitions to reach net-zero by 2030, Fortescue had to cut 700 jobs and pause some green hydrogen investments amid high energy costs and falling iron ore prices.

Yet at 4 times the market cap, BHP is a much larger player, with the capacity to absorb such capex. Still, producing cleaner commodities will require not only strategic partnerships but also regulatory clarity and technological breakthroughs.

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