As BHP Group looks at options to spin off or sell its thermal coal assets, the miner is facing pressure from climate conscious investors who want divergent paths and that’s even before getting to the tough task of finding a buyer.
The world’s largest miner has been in talks with stakeholders on its plans to divest the Mt. Arthur thermal coalmine, its stake in a steel-making coal project with Japan’s Mitsui and a stake in a thermal coal mine in Colombia.
Some large shareholders are pushing the miner to exit immediately while other investors want a slower exit, to ensure the mine is wound down responsibly.
How BHP, which faces about $1 billion in cleanup costs at Mt. Arthur alone, divests could be a template for other miners, including Glencore Plc and Anglo American who are also mulling ways to offload coal assets.
“The best thing that BHP could do is set a global precedent about how to exit responsibly,” said Tim Buckley, director of Australian think tank Institute for Energy Economics and Financial Analysis (IEEFA).
“The question is, how do you ensure the cleanup of the mess that you have created in a socially responsible way?” said IEEFA director Buckley.