Another side to hype over thermal coal

TWO DIRECTIONS: differing views on thermal coalWITH the Paris Climate Conference under way, lobby groups from around the world are calling the death rites on thermal coal for power generation.
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Two of the leaders of the “coal disinvestment” movement –350.org and Direct Invest –announced last week that 500 institutions responsible for more than $3.4 trillion in financial assets had made “some form of divestment commitment” in the 10 weeks before COP21, as the conference is known.

In Australia, the Institute of Energy Economics and Financial Analysis –which includes acampaign against coal use inits mission statement –said that BHP Billiton and Rio Tinto had quietly “exited” thermal coal without anyone noticing.

An article in the Fairfax-published Australian Financial Review said the divestment lobby had stopped campaigning against BHP and Rio because they had been “quietly selling their coal mines” and wereunlikely to approve new ones.

But the head of the mineworkers’ union in the Hunter, Peter Jordan, said on Sunday that BHP still owned the biggest thermal mine in the Valley, the giant Mount Arthur complex near Muswellbrook, which has approval to mine 36million tonnes a year.

Rio Tinto recently announced the sale of its40 per stake in Muswellbrook’s Bengalla mine, but it still owns the Hunter Valley Operations and Mount Thorley/Warkworth mines near Singleton, and the plannedMount Pleasant mine atMuswellbrook.

Mr Jordan said Rio had been threatening to sell out of the Valley for years.

“And our response has always been the same: we would welcome their departure, and we would welcome the arrival of a new operator,” Mr Jordan said.“They might sell them, but they won’t close them down.”

Both companies have sold thermal mines interstate or overseas. But one of the biggest moves was in May whenBHP sold the South African mines it had acquired in its 2003 merger with Billiton into a newcompany, South32.

Mr Jordan said Bengalla and Warkworth were two of five mines that Rio bought from Peabody 15 years ago when the US operatorleft the Australian market.