8 November 2018
Today’s BHP annual shareholder meeting in Adelaide saw the company vigorously defend its views and support for the long term viability of coal and fossil fuels.
Chief executive Andrew Mackenzie used his opening address to remind shareholders that “as a major producer and consumer of fossil fuels, we accept our responsibility to take action on climate change and reduce our greenhouse emissions.”
Last week, the mining CEO was quoted in the media as saying BHP “will not be emitting any additional molecule of CO2 into the atmosphere from 2050 onwards.” Earlier this year, BHP quit the World Coal Association because of material differences in energy and climate policies but remains part of the pro-coal lobby group Minerals Council of Australia (MCA).
Despite this encouraging rhetoric, the board was emphatic BHP had no plans to walk away from coal, which the company sees significantly contributing to its bottom line over the next two decades. BHP’s 2016 Climate Change Portfolio Analysis projects that, if there’s ‘a unified focus on limiting climate change’, coal for electricity (thermal coal) would be “competitive on the cost curve and generates acceptable returns.”
Meanwhile, a recently released IPCC report warns that meeting key climate goals requires thermal coal use to be virtually phased out by 2050, with about two-thirds of this reduction needed by 2030. When asked by a shareholder if BHP would therefore consider fast-tracking divestment from thermal coal, chairman Ken Mackenzie told the audience it would not.
Pushing coal for the long term
Questions about BHP’s membership of the pro-coal MCA also featured at today’s meeting. Earlier this year Coalwire’s Bob Burton pointed out that “with US$2.1 billion in revenue in 2016–17 from just two thermal coal mines, BHP has a lot riding on lobby groups pressing the case for new climate-damaging coal plants.”
Asked whether BHP agreed with recent comments made by MCA boss Tania Constable that “we don’t see a transition out of coal in the short, medium or even the longer term at this stage,” chairman Ken MacKenzie replied that BHP was aligned with the MCA.
Strikingly, this MCA statement is not inconsistent with BHP’s pledge to not emit “any additional molecule of CO2 into the atmosphere from 2050 onwards” which CEO Andrew Mackenzie explained only actually applies to BHP’s internal operations.
Indeed, as the mining CEO candidly admitted to shareholders today – “we won’t have entirely solved the much bigger problem; it’s the consumption of a lot of our products which actually produces an awful lot more CO2.”