BHP dark on thermal coal future

Mining giant BHP has become the latest resources firm to join the thermal coal exodus, telling investors it has “no appetite” to grow existing projects.

The company said it expects thermal coal as an energy source to be “phased out, possibly sooner than expected” and, as such, has no intention to grow its thermal coal portfolio “regardless of asset efficiency”.

The hardening of BHP’s attitude toward the type of coal used for power generation was revealed in a slide pack published ahead of a strategy briefing by chief financial officer Peter Beaven.

The presentation declares that the decarbonisation of the energy sector will see thermal coal ”phased out, potentially sooner than expected”.

The comments reflect a broader trend within the industry as key players become increasingly resistant to make further investments into thermal coal.

The black coal industry – which includes both thermal coal for energy and coking coal for steel production – is expected to decline at 6 per cent a year by 2024, Mr Aravanis said. However, that figure is mainly driven by falling demand for thermal coal.

“Coking coal is likely to continue to do well. Australia has an advantage on the coking coal space because ours is relatively pure compared with that of other countries,” he said.

Minerals Council of Australia chief executive Tania Constable said Australian thermal coal “is in great demand” globally and will remain so.

“Wind and solar are important elements of the global energy mix and fundamental to a global evolution to clean energy, yet while storage technology remains in relative infancy, renewables won’t meet the energy needs of developing countries or support their legitimate aspirations for economic development,” she said.

For more news:

https://www.afr.com/business/mining/bhp-dark-on-thermal-coal-s-future-20190521-p51psg

Mining giant BHP has become the latest resources firm to join the thermal coal exodus, telling investors it has “no appetite” to grow existing projects.

The company said it expects thermal coal as an energy source to be “phased out, possibly sooner than expected” and, as such, has no intention to grow its thermal coal portfolio “regardless of asset efficiency”.

The hardening of BHP’s attitude toward the type of coal used for power generation was revealed in a slide pack published ahead of a strategy briefing by chief financial officer Peter Beaven.

The presentation declares that the decarbonisation of the energy sector will see thermal coal ”phased out, potentially sooner than expected”.

The comments reflect a broader trend within the industry as key players become increasingly resistant to make further investments into thermal coal.

The black coal industry – which includes both thermal coal for energy and coking coal for steel production – is expected to decline at 6 per cent a year by 2024, Mr Aravanis said. However, that figure is mainly driven by falling demand for thermal coal.

“Coking coal is likely to continue to do well. Australia has an advantage on the coking coal space because ours is relatively pure compared with that of other countries,” he said.

Minerals Council of Australia chief executive Tania Constable said Australian thermal coal “is in great demand” globally and will remain so.

“Wind and solar are important elements of the global energy mix and fundamental to a global evolution to clean energy, yet while storage technology remains in relative infancy, renewables won’t meet the energy needs of developing countries or support their legitimate aspirations for economic development,” she said.

For more news:

https://www.afr.com/business/mining/bhp-dark-on-thermal-coal-s-future-20190521-p51psg