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BHP Plans Exit from Thermal Coal - Report

Coal News - Published on Tue, 16 Jul 2019

Image Source: SteelGuru
Bloomberg, citing people familiar with the matter, reported that the latest move by the world’s biggest miners to retreat from the dirtiest fuel, BHP Group is moving ahead with plans to exit thermal coal. BHP is looking at options to divest the business that includes assets in Australia and Colombia, said the people, who asked not to be identified as the development has not been made public. There’s no guarantee the company will go ahead with a sale. The decision demonstrates how growing climate-change pressure from investors and regulators is reshaping the future of extractive industries.

BHP had already signaled cooling interest in thermal coal. Earlier this year, Chief Financial Officer Peter Beaven said the company had no appetite for growth in the commodity.

While thermal coal makes up a fraction of BHP’s profits, it’s led to some investors saying they can’t hold the stock.

Norway’s USD 1 trillion sovereign wealth fund last month got the green light to dump more than USD 13 billion in stocks linked to fossil fuels, including companies that mine more than 20 million tons of thermal coal, pushing Anglo American and BHP out of reach. Climate Action 100+, which has the backing of more than 300 investors managing USD 32 trillion, has already forced reforms from extractive giants such as BP Plc and Glencore.

For BHP, thermal coal has become increasingly hard to justify. The company’s profits are driven by iron ore, oil, copper and coking coal (used to make steel) and thermal coal is likely to contribute just 1% of profit this year, according to Liberum Capital Markets.

Source :

Posted By : Sanju Moirangthem on Tue, 16 Jul 2019
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