BHP, the world’s largest mining company, has demonstrated its clout by firing the head of the Minerals Council of Australia, Brendan Pearson. Amongst the most competent and seasoned energy specialists in Australia, Brendan had led the MCA with self-effacing charm.
He had sought to ensure an integrity in the organisation (this being the second most important of BHP’s stated values – clearly trumped by the organisation’s view of it first stated value “sustainability”). MCA commissioned GHD to do the basic research on the costs of new coal in Australian generation; though careful to doff a hat to Political Correctness by measuring only high cost HELE (high efficiency low emissions) plant it estimated the costs at under $50 per MWh, much less than half of the costs of unreliable wind and solar. Such costing confirmed those of my own, which were developed by examining costs of the most recently commissioned Australian generator and estimating cost increases in coal, labour and capital since then.
Perhaps because its executives have caught the greenhouse climate change disease or perhaps because they fear the campaigning left, BHP has been in the forefront of politically correct statements on the issue.
It was a major supporter of the Gillard carbon tax and contributed heavily to funding the ALP taxpayer floated think-tank, the Grattan Institute, for which it also got a free pas from the ALP to pursue its unconsummated takeover of its iron ore rival Rio.
BHP bankrolls organisations like the World Resources Institute to give it a clean bill of health as a greenhouse gas emitter, claiming that its in-house and related emissions have been halved to about 18 million tonnes of CO2. Of course that excludes its sales of the fiendish emitting products which involve some 70 million tonnes of CO2 from coal and maybe half that in terms of gas and petroleum.
Coal and petroleum contribute $3.8 billion and $4.1 billion respectively to gross profits with only iron ore greater at $9.2 billion – though this itself like the other major commodity copper (earning $3.5 billion in gross profits) is valueless without subsequent use of fossil fuels for processing.
The key Australian manager and deliverer of the death blow was Mike Henry who has overseen impressive cost cutting and for this may even be worth his $4.5 million a year remuneration. Henry doubtless believes that the world must move out of carbon fuels but there is no path for the Bad Australian to achieve this. Indeed in a delicious irony, its South Australian smelter lost $138 million as a result of the wind-induced state blackout debacle last year, a coal replacement strategy that the firm has championed.
It may make a deal of sense for BHP to pay greenmail and denigrate the products that create its profits if in doing so they buy peace with the howling green agitators, who are proving their influence in the costly greenfare surrounding the Queensland Adani mine. But any net benefits that BHP shareholders from such strategies are peanuts compared to the damage its agitprop support does to the Australian economy.
p.s. Raider Elliott thinks BHP management have taken their eyes off the ball, as The Australian reports “BHP’s embattled boss has been given six months to save his job”
To his great shame Alan Moran admits to owning shares in BHP