Coal companies called out on future viability

22 November 2018

The recent United Nations Intergovernmental Panel on Climate Change (IPCC) report found that a jump from 1.5ºC to 2ºC of warming would mean the death of the Great Barrier Reef, twice as many people worldwide exposed to water stress, and an extra 40,000 people in small island countries inundated by sea level rise.

The IPCC’s modelling also confirmed that if we are to have any hope of keeping global warming under 1.5ºC, the world must phase out of coal by 2050. Fossil fuel companies who do not plan for this transition face losing millions in stranded assets.

It’s therefore understandable that climate change concerns were voiced by shareholders at the annual general meetings of both Prairie Mining Limited and New Hope Coal this week.

Both are pure-play coal companies listed on the Australian securities exchange. Prairie’s coal mining operations are based in Poland, while New Hope has two open cut coal mines in south eastern Queensland.

New Hope Coal: woeful lack of understanding of climate change

A Queensland farmer asked New Hope Coal’s board if they believed in climate change.

Chairman Robert Milner seemed unsure. He cited a study on the Pacific Islands in which he claimed sea level had started to rise but then gone down again.

Given the obvious lack of understanding of climate change impacts, a shareholder asked what the board had done to educate themselves on climate change over the past year.

Milner covered his ignorance with arrogance: “Obviously we are all intelligent people. Our business is sitting on a coal and oil company. With intelligent people we can keep abreast of what is happening.”

Prairie Mining: climate change “not on our radar”

A shareholder wanting to know if Prairie Mining’s board supports the Paris agreement received a bizarre response from chairman Ian Middlemas.

“I don’t think we have ever specifically addressed it as a board. I think they are the sort of questions that are for people that are producing product and have got an actual operation. We’re just simply exploring,” he said.

“So I’m not sure…. just trying to think of what’s a good example… it’s like if you have a toddler at home and someone asks which university will he go to, well the answer is ‘We will work it out when he is 18’.”

Middlemass added: “I’d love us to be in a position where we have to have an idea about climate change, and an idea about Paris you know…what you just raised. But it’s sort of like having an idea of what happens in Sydney when you live in Perth. It’s not in our radar, really.”

The shareholder reminded the board that as a business, Prairie must make projections into the future. “And these are definite future changes that are just around the corner in terms of regulation.”

Middlemas, however, disagreed with this view. “Fortunately they are not just around the corner for us as a company… There are a thousand things we have to consider before we consider that.”

Take action

Does your super fund have shares in fossil fuels? Find out here and tell your super fund to stop funding coal, oil and gas, which is killing the Great Barrier Reef.