25 October 2018
For a global mining group, South32 has been ahead of its peers not only in their willingness to accept climate science but also in publicly disclosing the risks the business faces. The company even set an emissions reduction target of net zero by 2050 – not bad for this BHP spin-off whose main products include aluminium, bauxite, and both metallurgical and thermal coal. But is the company doing enough?
Global warming scenarios
Like so many other companies, South32’s board admit they’re on a climate change “journey”. While the company has looked carefully at different global warming scenarios, at today’s annual general meeting (AGM) its board explained how they’re yet to align the business with a specific scenario:
Getting out of coal
South32 presented a paradox earlier this year when CEO Graham Kerr stated: “Thermal coal becomes more of a focus [for investors] when you think about climate change… We’re making a strategical call on energy coal – it’s hard to price in the medium to long term.”
However, while SAEC is valued at a mere $59M, South32’s plans to sell this side-business coincided with its announcement to invest $301M to extend the life of one of the four mines, the Klipspruit colliery, by 20 years. Commentators described the move as a ‘sweetener’ for potential buyers.
Shareholders at the AGM tried to probe the board further on the millions poured into Klipspruit but the issue was brushed aside. It was, according to South32’s chairman, simply “an extension of an existing operation”:
Impacts of coal on communities
South32 may be trying to get out of coal in South Africa, but it couldn’t avoid the group of women who flew all the way to the Perth AGM to present the findings of a year-long investigation into the impacts of the controversial Mpumalanga mine, particularly on health and women’s rights.
Prior to the AGM starting, the board had agreed to the demands put forward by ActionAid to meet with, and hear the women’s concerns.
While South32 does recognise that thermal coal has a serious impact on our environment, we’re yet to see the company make a genuine move to leave it in the ground.
Your super fund might invest in South32. Tell them to demand real climate action from the companies your retirement savings are invested in.