World's largest miner backs away from coal projects
Posted August 18, 2020 1:30 p.m. EDT
CNN — The world's largest mining company is looking to reduce its exposure to coal as opposition to high-carbon energy sources takes hold.
BHP, which is based in Melbourne, Australia, said Tuesday that it will try to sell its 80% stake in the BHP Mitsui Coal joint venture, which owns two Queensland mines that produce lower-quality coking coal, which is used for steelmaking. It's also looking to offload its thermal coal assets in Australia and Colombia.
Shares trading on the London Stock Exchange fell 2.6% after the company reported earnings.
Under new CEO Mike Henry, BHP is looking to ramp up its copper and nickel extraction businesses while divesting "mature" oil and gas assets, a sign that the company is preparing for a future in which the energy mix looks a lot different.
Henry is also focusing BHP's coal portfolio on higher quality coking coal mines.
"In a decarbonizing world, we see there being upside for those assets," Henry told analysts.
The coronavirus pandemic hammered demand for oil, gas and coal as factories were shut, planes were grounded and people were ordered to stay at home. Some analysts think demand many never fully recover, encouraging companies to accelerate green energy plans.
Earlier this month, BP unveiled a tenfold increase in low-carbon investments as it prepares for a world that uses much less oil.
The company, which is selling its petrochemicals unit, said demand for fossil fuels could fall by as much as 75% over the next 30 years if the increase in global temperatures is limited to 1.5 degrees Celsius.