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China is experiencing "a fairly stable V-shape" restoration, in line with the CEO of BHP Group.

After the unprecedented decline in global economic activity due to Covid-19, BHP Group's CEO Mike Henry sees a recovery on the horizon, but one that will take a few years.

"We assume that the global economy will shrink sharply this calendar year," he said on CNBC's "Squawk on the Street" on Wednesday. "We then assume that there will be a pretty sharp spike again next year. We therefore anticipate that it will take about a year for the world to return to pre-Covid levels, and maybe two or more three years for the world. " to get back on track that it would have been without Covid-19, "he added.

As the largest miner in the world, BHP is severely exposed to economic booms and busts. One bright spot is China, where Henry said a "pretty solid V-shaped rebound" is underway.

On Monday, spot prices for iron ore rose to their highest level since 2014, amid an infrastructure boom in China, according to the commodity price reporting agency Argus.

In July, the nation imported a record 112.65 million tons of iron ore – a 24% increase from last year – as the government continues to add money to the economy.

"The [Chinese] government has stepped in with some incentives that we expect will continue to give momentum by next calendar year. So things are looking pretty positive and pretty resilient," said Henry.

BHP's results for the June 30th fiscal year ended June 30th indicated that iron ore represented 48% of the company's sales. Because of the segment's relatively high margins, it accounted for 64% of the company's earnings before interest, taxes, depreciation and amortization.

Climate protection & # 39; good & # 39; for BP

ESG investing, or when a company's environmental, social and governance factors are factored in alongside traditional financial metrics, are becoming increasingly popular. In the second quarter, global assets under management in sustainability funds exceeded $ 1 trillion for the first time, according to Morningstar.

Part of BHP's business is coal-focused, which means environmentally conscious investors could avoid the stock.

But Henry said that taking action against climate change is ultimately good for the company as it will build a more resilient global economy. He also noted that BHP is one of the world's largest suppliers of nickel, which is used in batteries for electric vehicles.

BHP has announced that it will be carbon neutral by 2050, but does not yet have a detailed plan on how to achieve this goal.

BHP's shares are unchanged this year.

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