BHP (ASX, LON: BHP), the world鈥檚 largest miner, is said to have hired Macquarie Bank and JP Morgan to sell its Mt Arthur thermal coal mine in Australia, as pressure from investors and the public to reduce its exposure to fossil fuels mounts.
Located in the Hunter Valley region of New South Wales, the Mt Arthur open pit mine is the largest individual coal production site in the area.
The operation, which supplies thermal coal used as fuel for power plants locally and internationally, is expected to sell for less than $1 billion,聽Reuters reported.
BHP鈥檚 thermal coal business makes up a very small part of the miner鈥檚 portfolio, contributing about 3% of turnover
BHP has been taking several steps away from thermal coal in recent months. In April last year, it left the World Coal Association (WCA) over differences on climate change. Before that, chief financial officer Peter Beaven had hinted that BHP was looking at alternatives to remove the fossil fuel from its portfolio 鈥減otentially sooner than expected.鈥�
Beaven noted at the time the miner would rather focus on commodities that enable the聽electrification of transport and the decarbonization of stationary power, such as copper and nickel.
Thermal coal currently makes up a very small part of聽BHP鈥檚 portfolio, contributing about 3% of turnover. The Melbourne, Australia-based company even said in February that if a good offer came along, it would be willing to sell.
Tackling emissions
Yielding to pressure from stakeholders, BHP has聽committed $400 million over five years聽to reduce greenhouse gas emissions from its operations and mined commodities.
It has聽also vowed to reduce its Scope 3 emissions 鈥� 聽those generated by customers through the use of the company鈥檚 commodities 鈥� which are 40 times greater than those generated by its mines and oilfields.
BHP鈥檚 move would mirror those of its main rivals, Rio Tinto (ASX, LON: RIO) and Anglo American (LON:ANGLO), which聽have offloaded all or part of their coal assets.
Since early this year, roughly 800 financial services organizations with $118 trillion in assets under management have committed to making climate-risk disclosures about their portfolio investments. 聽
鈥淒espite the business case in support of decarbonization, many mining companies continue to see it as a cost rather than an opportunity 鈥� making it difficult for proponents to unlock the capital required to move forward,鈥� Tim Biggs, Mining & Metals Leader, Deloitte UK,聽told 九游下载apk in February.
鈥淎 massive shift toward electrification could also change the way employees work, requiring companies to obtain buy-in not only at the management level, but at the operations level,鈥� Biggs said.