Guest essay by Eric Worrall
Market Forces, an Affiliate of Friends of the Earth, wants regulators to smack New Hope Mining for claiming coal is here to stay. But New Hope have quietly challenged the viability of the entire renewables industry, in an official company document. If this goes to court, buy plenty of popcorn.
New Hope mining company referred to Asic, accused of misleading investors over future of coal
Investor action group Market Forces says coal company is ‘building a financial house of cards’ by telling shareholders coal will remain ‘significant’ in energy mix
Ben Smee @BenSmee
Wed 21 Jul 2021 14.20 AESTShareholder activist group Market Forces has asked the corporate watchdog to investigate whether coal company New Hope misled investors by claiming that coal would “remain a significant part of the energy mix”.
In letters sent to New Hope Corporation and the Australian Securities and Investments Commission, lawyers for Market Forces have alleged that statements by the company’s chief executive, Reinhold Schmidt, may amount to “misleading and deceptive conduct” under the Corporations Act.
In September last year Schmidt told the Australian Financial Review that “thermal coal is part of the long term energy mix, it will always be there”.
At the company’s annual general meeting the following month, Schmidt’s was asked whether he stood by that statement. He responded by referring to the International Energy Agency’s forecast “current policies” and “stated policies” scenarios.
“If you look at [those scenarios] coal will remain … a significant part of the energy mix. Australia has got a very strong benefit when compared to other coal producers; our coal is of better quality and my statements remain unchanged.”
In its letters, Market Forces says these statements omitted that the IEA had qualified its forecasts by pointing to “significant uncertainties, including more rapid action to phase out coal”.
…
Read more: https://www.theguardian.com/australia-news/2021/jul/21/new-hope-mining-company-referred-to-asic-accused-of-misleading-investors-over-future-of-coal
From the Market Forces website;
ASIC investigation requested into New Hope statements
21 July 2021
…
Gambling on failure of the Paris Agreement
The energy demand scenarios New Hope relies upon to justify its future business prospects are consistent with global warming of around 3ºC. This would lead to catastrophic ecological, social and economic consequences, and gambles on the complete failure of the Paris Agreement, which aims to limit global warming as close as possible to 1.5ºC.
As of July this year, 191 countries have ratified the Paris Agreement, while countries representing over 50% of the global economy have committed to net zero emissions by 2050 [3]. According to the IEA’s most recent report (Net Zero by 2050: A Roadmap for the Global Energy Sector), no new coal mines or expansions can proceed and coal demand must plummet in order to achieve net zero emissions by 2050 [4].
Actively expanding the coal industry
At a time when coal companies should be winding up their operations, New Hope is actively expanding the coal industry via its proposed $900 million New Acland Stage 3 coal mine – a 12 year expansion to the existing mine that would produce over 170 million tonnes of carbon emissions [5] and see three vast open-cut coal pits dug on the prime agricultural land of the Darling Downs.
Additionally, media reports suggest New Hope may be bidding to purchase BHP’s Mt Arthur coal mine, one of the biggest thermal coal mines in Australia [6]. New Hope recently raised $200 million of bonds, “for general corporate purposes, which may include further growth expansion and opportunistic M&A [(merger & acquisition)] activity” [7].
…
Read more: https://www.marketforces.org.au/asic-investigation-requested-into-new-hope-statements/
Should New Hope have said more about the sovereign risks to its business model?
Given even France is failing to meet its Paris Agreement commitments, according to a French court ruling, surely it could be argued in any future court case that the Paris Agreement is a political fantasy.
There are sovereign risks, which New Hope acknowledges; According to New Hope Coal Annual Shareholders Report 2020, … One major headwind for the Company is the continued reluctance of the Queensland Government to approve the New Acland Stage 3 project, despite overwhelming community support, and the economic damage being wrought on the State by COVID-19. New Hope first applied for Stage 3 approvals in 2007 and has been locked in the process by anti-coal activist groups since then …
But New Hope has also laid out a challenge to the entire renewables industry, in that same annual shareholder report.
… Once again, during a period of low pricing in the coal business, we see activists take the opportunity to predict the end of the industry, pushing for their preferred solution of renewables which, at this time, cannot economically or practically displace fossil fuels. According to the 2020 BP Statistical Review, in 2019 coal consumption declined, but still accounted for 27% of primary energy supply. Despite considerable growth, renewables accounted for just 5% of supply. In electricity generation, coal’s share decreased but still accounted for 36%, well above the next most popular fuel which was gas at 23%. Renewables grew from 9% of electricity generation in 2018 to 10% in 2019. Coal’s decline in 2019 was not just due to an increase in renewables, but also to the increasing competitiveness of gas in the fuel mix. Coal use declined strongly in the US and Western Europe but was largely offset by increases in Asia. The International Energy Agency’s World Energy Outlook 2019 Current Policies Scenario has steam coal use increasing significantly from current levels through to 2040, whilst the Stated Policies scenario has steam coal use staying relatively flat through to 2040, with over 80% of steam coal demand being in the Asia Pacific region …
Read more: New Hope Coal Annual Shareholders Report 2020
I strongly suspect Friends of the Earth will realise they have bitten off more than they can chew, and that they will quietly slide back into their hole when they come to their senses.
But maybe we will get lucky, and Friends of the Earth will continue their self destructive attack.
New Hope Mining have done what we have all been waiting for – they have quietly challenged the entire renewables industry, by explicitly pointing out the falsehood of claims that renewables are a viable replacement for fossil fuel in an official company document.
If Australia’s ASIC regulator attempts to prosecute New Hope, the issue will end up as a court case which could drag in other companies, as New Hope defends its claim that renewables are not a viable replacement for coal.
If New Hope wins, it could up-end the entire Australian renewables industry, by opening the door to a stream of counter suits, official complaints to ASIC about wild claims made in the official corporate documents of green energy companies.
To contrast with the fantasyland the activists inhabit. Oil Price reports China is upping its coal extraction rate by100MTpa and are planning for 5 times that amount. That sounds very much like thermal coal has a future.
At last…a major company saying “enough is enough” and being prepared to take these green zealots on head to head. Let the battle begin!
Speaking truth to (fictional) power. Bravo!
Just focus on ROI. That’s what business should be doing. Paris agreement doesn’t seem to be affecting coal use for power generation in developing countries. Just show the forward orders.
Made my heart glad to read this
Australian coal has a limited future…
SE Asian states are cancelling new coal plant, India is trying to source coal domestically…
China will continue its trade wars with Australia…
In your dreams.
To further prove that Griff isn’t a dreamer, just a liar, steel making coal exports from Australia to china have increased and the price has gone up. Australia Sees Stronger Coking Coal Exports – World-Energy
Note how the Chinese stockpiles have run out.
No they aren’t. Here’s a map of every coal fired power station on the planet (closed, operating, new and planned).
Drag the slider to 2020 and see how much ‘pink’ there is on that map.
Fascinating link Rusty. If we look at China in 2009, the year of the COP in Copenhagen when we had just 10 years to save the planet, they had 581,010 MW of coal-fired generation. 10 years later in 2019 China had 1,004,098 MW — an addition of 423,088 MW.
In the same period the US retired 89,115 MW and the EU (including uber-green Germany) retired 45,442 MW. IOW, a net reduction of 134,557 MW. Except for India and “other asia”, all the other areas are either holding steady or have so little reduction it amounts to less than a rounding error.
To put that in perspective, in those 10 years China alone added 3.15 times more coal-fired generation than the rest of the world retired.
But wait; there’s more.
Over the same 10 years India added 140,334 MW (India coal-fired generation is essentially the same as US now), and “other asia” added 77,280 MW. India increases essentially matched the decreases everywhere else.
China, India and “other asia” have added 500,382 units of CO2-emitting coal-fired generation while the rest of us manage to take away just 134,557.
In spire of this, I believe that in 2021 we now have at least 12 years to save the world. It seems that the more coal-fired generation is built, the more time we have to save the world.
The conclusion is obvious: we aren’t doing our part!
Oops, addition error above, should read:
“China, India and ‘other asia have added 640,702 units of CO2-emitting …”. Or 4.75 times what everyone else has shut down.
You wish. As with iron ore, China will still buy what it needs.
I have already stated the “griff” entity is a nutter.
We don’t even know where he lives (or claims to).
You can’t argue with nutters.
UK
He claims to have had a family member or members who were coal miners in the past.
Griff, as a child did you stick your fingers in the electric power point ? or is there another reason your brain is reversed ?
Almost every comment you make is a complete reversal of the truth.
I suspect he/she/it is a native of DC Comic’s Bizarro world.
.he am the #1 genius of bizarrO worlD.
(as they would say in Bizarro World).
You forgot: and elephants do fly.
Nonsense; Australian coal is still a major export to China, Japan, and South Korea. Only an useless idiot would speak against miners who work hard to make a living for themselves and many others in their community.
The Woke crowd have no problem throwing hard working people under the political bus, and certainly have no qualms about lying to people that there’s going to be ‘high paying green jobs’.
Hahahahaha!
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https://s0.wp.com/wp-content/mu-plugins/wpcom-smileys/twemoji/2/svg/1f602.svg
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Have some more of that Kool-Aid giffie!
Less than 3 weeks old:
https://www.reuters.com/world/asia-pacific/asias-new-coal-plant-plans-jeopardise-climate-targets-report-says-2021-06-29/
Six Hundred New Coal Plants planned in Asia. If Asian countries are cancelling new coal plants, someone didn’t tell the Asian countries!
Once again, griff reports his fantasies as if they were proven fact.
Who would have thunk? Griff is also an expert in world trade and resource economics.
You are right griff, Australian coal has a limited future…*IN* Australia. However, Australia will still be exporting coal to other countries unabated.
”Investor action group Market Forces says coal company is ‘building a financial house of cards’ by telling shareholders coal will remain ‘significant’ in energy mix”
Without coal the smelting of steel would not be possible, with present technology in a large scale, to manufacture the enormous amount of steel required to make wind farms. So Market Forces have shot themselves in the foot which ever way you look at it.
Bingo.
It takes a new level of stupid to come up with an idea that will consume resources endlessly without any beneficial result. No miner could ever come up with such a dumb idea but they have realised the fruitless effort provides unprecedented demand for all the stuff they mine. All big miners are right behind the push.
Think how easy it gets to start a copper mine when every planet saving wind generator needs 3t of it. It is the same unregulated fervour that enables forests to be bulldozed for those same wind generators.
Regulation hurdles get eliminated when the planet needs saving; after all, there is a climate emergency!
Nor is refinement of silica into silicon metal possible without coal.
You can’t even make solar cells without coal!
There are calls from alarmists, and politicians, for Australians to “pay a carbon tax” on coal exports burnt in other countries.
Kid you not.
The attached guidance from KPMG suggests New Hope is providing more than adequate disclosure
https://home.kpmg/au/en/home/insights/2020/06/climate-disclosures-annual-report-australian-focus.html
Eric,
On 27 May last there was posted here “Both Sides declare victory in Aussie Children’s Climate litigation Coal Case.”
To add to the New Hope good news,we now have breaking news of the Minister for the Environment,Susan Ley appealing the ruling by Justice Bromberg in the Federal Court that there exists a novel duty of care requiring consideration of “ climate change” danger to youths in deliberations by the Minister to extend the Whitehaven Vickery coal mine in New South Wales-
https://www.smh.com.au/environment/climate-change/environment-minister-appeals-ruling-she-must-protect-children-from-climate-harm-20210721-p58bpm.html
This could get very interesting.
And if FOTE withdraw their complaint they are equally sunk because it would mean that they don’t believe in their own mantras. Everytime they try to revive the nonsense we could just ask them: if you believe that yourself, why don’t you sue king coal?
Ed, the alarmists always try and rubbish those of us who are not “climate scientists” saying we know nothing of the science. However, as you note in your comment, we have the ability to recognize flawed reasoning and question why climate alarmists are too petrified to engage in a civil and thoughtful public discussion of their main claims.
I always state that their are no such entities as “climate scientists”, only scientists who study certain aspects of the Earth’s climate! As I understand it, there are some 80 different/associated scientific subjects going in to making up the study of Earth’s climate! So if climate scientists exist, assuming a 4 year initial science degree, lets assume that each other subject only takes a further 6 months of study (unlikely), that works out at 80 further half-yearly studies making 40 years! Assuming 18+4 = 22 years of age, + a further 40 years, that makes a true climate scientist around 62 years old to be able to fully understand how Earth’s climate works (again unlikely)!!! Just my humble opinion!!!
That’s an interesting observation. It’s not uniquely true for “climate scientists” — I hope one would not consult a real estate attorney if they were charged with murder, but the study of climate does cover such a large number of fields, virtually all the practitioners are knowledgeable in a relatively small subset of the relevant fields.
Popcorn futures soar.
In other news. Black swans discovered living in Australia.
—– Market Forces, an Affiliate of Friends of the Earth—–
really have got such A Chip on their shoulders – they really do think that everyone else in this world is stupid
How would anyone go about introducing them to the notion of ‘Projection’
Because and not least, if they were or are Friends of the Earth, they’d be Au Fait with this:
Dirt: The Erosion of Civilisation
[From the National Park Service of all places. it warms my little heart]
As I see it, if Climate Science does not represent the Erosion of Civilisation – wtf does?
and yes Market Forces, I’m looking at you
In Australia it may be that thermal coal has no long term future, but that is only because of the activities of the regulator.
However the World situation is starkly opposed to this.
Now that Australia has the largest uptake of solar panels in the world, per capita, in about 10 years they will start to burn out making them useless and leaving a heavy disposal problem.
It could well be, after that time, that reliable nuclear or gas may have been priced out of our market and coal may make a comeback.
Particularly if we have further cooling and no one else in the biggest communities, on average, is cutting CO2 emissions, as is the trend now.
If the Australian judicial system is similar to the UK, the case will be heard before an activist judge who will put people’s feelings ahead of awkward things like facts.
Bdtp, it’s ALL about feelings these days! Even apparently sane people say things like “Yes we fully understand the points you are trying to make (trying – the classic put-down), but it was “felt” that you haven’t fully understood the situation”! It’s all feelings today!!!
The term “renewable” as applied to weather dependent electricity generators is misleading. Until these devices and associated storage can produce more energy than they require to make them, they are unrenewable. The simple fact that none would be connected to the grid without subsidies is proof enough.
Not sure about the “renewable” part but, if as you state more energy is required to create them than they can produce in their lifespan, they certainly AREN’T SUSTAINABLE
And their creation, installation, maintenance and eventual decommissioning still require extensive mining, including Coal
The big miners will not like the position New Hope are taking.
Weather dependent electricity generators offer a once-off opportunity to push all resource prices to the moon.
Iron ore currently trading USD220/t. It cost BHP and Rio Tinto USD18/t to mine; and Australia provides about 800Mt of it each year. Copper has unprecedented demand apart from war times. BHP has just done a deal to supply Telsa with nickel. Alumium, glass and silicon are experiencing unprecedented demand. And it all takes a lot of fossil fuel to make the useless WDGs. No thinking miner wants to stop this enormous waste of resources that is driving up prices to windfall levels. The want the gravy train to keep building pace and are doing all the things they can to ensure it carries on.
New Hope will not have many friends in the mining business.
Yes Rick
UK December gas trading at nearly £1/therm
UK Brent Crude $72.80/te
WTI $70.20/te
All good news for the oil and gas majors and their business models.
Coal is $130/te CIF ARA, so looking good for producers.
The market doesn’t seem to share the doom and gloom for the fossil fuel extractive industries. Strong signals to invest and increase supply which will be hard to ignore for business profitability and for governments (duties and taxes).
Yes, the Paris agreement is a political fantasy in that the “target” will never be met. But perhaps that was not the main objective with the agreement.
Yes – the main objective is to get more countries to join the mass lunacy and of course to send money.
“New Hope Group is a majority Australian owned” from their web page.
More popcorn needed to watch how Oz super funds react to New Hope stance.
Methinks the industry super funds are just a mite conflicted between green wokey folks and their mining union members. You know, elite unions verses worker unions.
It will be fun to observe these industry funds are NOT “all in this together” jingle, jingle.
According to the World Coal Association
Dave do you know if there are any figures on how much coal is utilised annually on wind, solar, backup batteries and EV’s? None of these industries would exist without coal, and crystalline silicon solar panels need coal for the panels themselves and for the lengthy thermal processes. They certainly use coal furnaces in China to make the silicon, and half of that is lost when they saw the wafers.
It would be good to know just how much coal we are wasting on this industry. Not to mention all the other raw materials. All for naught.
Megs unfortunately I have been unable to find anything that provides the information along the lines you are asking.
However in 2016 Vaclav Smil wrote a short article that calculated if wind generated electricity were to supply 25% of global demand by 2030 then even with a high capacity factor of 35% the aggregate installed wind power of 2.5 terawatts would require 450 million metric tonnes of steel.
https://spectrum.ieee.org/energy/renewables/to-get-wind-power-you-need-oil
I love statements like this, the are so “nice” sounding yet mean nothing:
“As of July this year, 191 countries have ratified the Paris Agreement, while countries representing over 50% of the global economy have committed to net zero emissions by 2050″
The “global economy” doesn’t matter as a measure. For example, Google and Facebook did as much revenue as they entire worldwide structural steel market. I would comfortably wager that the CO2 output of that steel production was orders of magnitude more than Google and Facebook.
Share of economy doesn’t matter, especially for FinTech, IT and other high-tech/software-based companies. But wow, it does certainly sound good!
You might be shocked how big the “carbon footprints” of Google and Facebook are (which they of course would never admit). Every web search or post accesses or involves oodles of servers consuming oodles of electricity, most of which is supplied by coal and natural gas.
Isn’t it obvious that Market Forces must next ask the International Court of Justice to smack down the IPCC for daring to use Representative Concentration Pathways (“RCPs”), which predict possible evolution profiles of greenhouse gas concentrations based on projections of future use of coal and natural gas out to year 2100.
In other words, how dare the IPCC claim that coal and natural gas will be “here to stay” for the next 88 years!
Duhhh . . . make that the next 78 years.
“and gambles on the complete failure of the Paris Agreement, which aims to limit global warming as close as possible to 1.5ºC.”
Can I get in on the gamble?
I would alter the bet in the other side’s ‘favor’. I would bet on the complete failure of the Paris Agreement for sure. It’s pretty much done now with the 5 billion non-Western folk going gangbusters on coal power to raise their peoples out of poverty -we will see 600ppm CO2 before 2100. Also we seem to be reaching peak renewables with Germany opting for coal and the new gas pipeline from Russia, despite the ongoing blather from the ruinables folk.
But also, seeing over the past 20yrs the constant adjustments of temperatures to make them fit the CO2 Control Knob theory and the shifting of goal posts from 1950 to 1850 to pad the warming books by purloining the 0.6°C caused by natural variation recovery from the LIA as part of the 1.5°C. Up until 2015, it was the need for a limit of 2°C by 2100 as measured from1950! Why would they do that? Simply because of forecasts that 30yrs later were 300% higher than observations.
How many coal fired electric plants are China and India building? Expect coal exports to increase.
The problem however is that, in the current political environment, facts and proper account and forecasting have no influence on the Woke crowd. They just go with their programming and ignore reality.