‘OLD’ BHP IS COOKING WITH AMERICAN GAS

THE most remarkable feature of BHP’s – sorry, BlueScope’s – profit was that there was a profit to report. Indeed, and I must stress that I am not talking about this one latest result, but long term over a number of years, not just that the company made a profit but that the company even existed.

BlueScope is the “old” – some might reasonably say, the real – BHP of good old Aussie steelmaking.

It was floated off from the continuing and BHP name-retaining “newer” BHP, given a new name – BlueScope – and left to sink or swim all on its own.

The “new”, the continuing BHP, would just focus on digging or pumping the stuff out of the ground.

In their more honest, private moments, those at the continuing BHP would have thought BlueScope’s chances of long-term survival were “optimistic”.

After all, the “new” BHP – which, coincidentally, reports its profit today – was embarked on building its future by aggressively selling more and more iron ore (and coal) to China.

A China, whose steel industry was set upon aggressively ripping the heart out of competitors like BlueScope!

Defying those expectations, BlueScope has not simply survived but thrived; true, focused around downsizing dramatically.

Gone are the days when it would pump out six million tonnes of raw Aussie steel every year; it’s now doing around two million (Aussie) tonnes.

But also by doing it all much smarter and more focused.

And most critically of all, by moving into steelmaking in the US.

And being just as smart, focused and efficient over there as it now is at home.

The two businesses are now roughly the same size – each with around two million tonnes of output, and depending on year-toyear dynamics, generating similar profits (and profitability).

But BlueScope is going to be investing in the US, not here. It’s committed to spending around $1 billion to boost its US steel output by 50 per cent, to around three million tonnes a year. And it could move quickly to add a further 500,000 tonnes on top of that.

Why there and not here? There, because of a certain President Donald Trump.

Not here because of, well, just about every politician – state and federal – with a couple of honourable, but utterly ineffectual exceptions.

And if you had to pick one “outstanding”, well, let me use the term “down under disappointment”, it would be a certain former recent prime minister named Malcolm, who shares the same letter surname but very little else with the US president.

That – utterly clueless – former PM would take the absence of this overlay as a compliment.

It is not. And it was captured in why BlueScope is spending – correction, has to spend – the money there not here.

In simple terms, President Trump has got “industry’s back”.

Indeed, he’s got the individual worker’s back and so also both directly and as a consequence of supporting US industry, also the backs of every American.

EVEN before I explain how he’s “got their backs” – and so BlueScope’s money and investment – could you really confidently claim the same about any specific governing politician, federal or state, Coalition or Labor.

And indeed their shadows, at both levels again, from the other party of government in the Opposition ranks, down here?

First, narrowly relevant to BlueScope, President Trump is directly taking on

the China steel Godzilla.

Yes, the tariffs he’s imposed will hurt the US consumer – in the shortterm. While being great for BlueScope (and its workers): it sells 100 per cent of its output straight into the US market and indeed close to its mill.

But the pain imposed on the consumer is the – hopefully productive – pain that has to be, to rebalance the trade dynamic between the US and China.

But the really big thing President Trump has done for all Americans, is to deliver cheap, plentiful and reliable energy to business and consumers alike. He’s essentially done two things: To walk away from the fake Paris Climate Accord and to let the fracking bloom.

President Obama grudgingly had to allow the second although he did what he could to stop it on federal land.

Bottom line, as BlueScope CEO Mark Vassella noted yesterday, their energy costs in the US are just one third – just let me repeat that, one third – of what they are in Australia.

WHERE would you spend the money, PM and federal opposition leader? And indeed every

state premier and state opposition leader? One-word replies only. It’s not just every single Aussie business – whether you are trying to run a steel mill, an office, or store, or milk bar – that has to pay this crippling triple what their equivalents in the US pay for energy, but every

Australian just to turn the lights and heating on.

And all totally, viciously and just basically stupidly, unnecessarily so.

Just to virtue-signal doing “something” on climate. And the most potent pointless virtuesignaller was Malcolm.

The day after Trump won in 2016, he could have seized the moment to walk away from the Fake Paris Accord.

Instead he doubled down by formally committing to it; taking then environment minister now Treasurer Josh Frydenberg with him.

And that’s why we get the real BHP building steel mills in the US not in Newcastle or Wollongong.

And how long until it closes what’s left in Australia? Along with every other business being fried on power?

IN SIMPLE TERMS, PRESIDENT TRUMP HAS GOT “INDUSTRY’S BACK”. INDEED, HE’S GOT THE INDIVIDUAL WORKER’S BACK