BHP fails to win friends with its Hunter Valley exit plans

HOGSBACK is amazed at how the shameful decision by the BHP board to abandon coal mining in New South Wales’ Hunter Valley by selling the Mt Arthur coal mine has reunited political commentators from all sides in condemnation.
BHP fails to win friends with its Hunter Valley exit plans BHP fails to win friends with its Hunter Valley exit plans BHP fails to win friends with its Hunter Valley exit plans BHP fails to win friends with its Hunter Valley exit plans BHP fails to win friends with its Hunter Valley exit plans

BHP's decision was apparently prompted by shareholder activist and hedge fund pressure to do its bit to reduce greenhouse gases - irrespective of the impact on local coal mining communities and the national economy.

Former federal resources minister turned backbencher Matt Canavan did not hold back in condemning BHP's actions.

"BHP claims that they care about the environment so they are trying to sell coal assets," he said.

"Yet they apparently want $1 billion for Australia's biggest coal mine, Mt Arthur.

"If BHP really cared about climate change why are they seeking to profit from the future use of coal?

"An asset's value today is just reflective of the future profits it is expected to generate.

"This is just another example of business virtue signalling rather than actually doing something that matters. So sad from a company that was once essential to the industrialisation of Australia."

Surprisingly, the Lock the Gate Alliance was also not impressed with BHP.

It claims there is a risk that a less experienced player will buy Mt Arthur from BHP as part of its divestment of thermal coal and fail to carry out the extensive rehabilitation required.

Lock the Gate Alliance NSW coordinator Georgina Woods said BHP had made a lot of money out of Mount Arthur but now that it has started losing money "it wants to turn tail".

"The Hunter region deserves some of this year's $9 billion profit for environmental repair and economic diversification," she said.

"Rehabilitation of Mt Arthur would also address serious environmental risks - as it stands the mine has many open pit voids that threaten the Hunter's waterways and leave the land unusable. "

These pits act as groundwater sinks, reducing river flow and increasing salinity for generations into the future.

"BHP's legacy in the Hunter will be a huge toxic pit lake, hundreds of metres deep and several kilometres long, that will continue to pollute the Hunter River for the next 250 years."

If BHP thought it would win friends and influence people with its decision to get out of thermal coal it appears it is sadly mistaken.

There's a perception that it is kicking the industry while it is down.

As federal member for the Hunter Joel Fitzgibbon said: "The mining industry is now suffering from a slowdown in Asian economies, therefore a massive reduction in demand.

"And that's forcing mining companies to wind-back their production and I fear we are now just getting a small taste of what it would be like in the Hunter Valley, without our coal mining industry."

Hogsback reckons the coal industry needs all the support it can get and major companies such as BHP should remember their history and how they got to where they are today.