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Bloomberg: Coal Divesters Sweetening the Deal with New Long Term Permits

Guest essay by Eric Worrall

According to Bloomberg, mining giants are pimping every last penny out of their divestment coal asset sales, sweetening the deal by arranging long term operating permits for the new buyers.

Investors Pushed Mining Giants to Quit Coal. Now It’s Backfiring

There’s growing unease that the divestment campaign could lead to more coal being produced for longer.By Thomas Biesheuvel +Follow9 November 2021, 10:01 GMT+10

It was supposed to be a big win for climate activists: another of the world’s most powerful mining companies had caved to investor demands that it stop digging up coal.

Instead, Anglo American Plc’s exit from coal has become a case study for unintended consequences, transforming mines that were scheduled for eventual closure into the engine room for a growth-hungry coal business.

And while it’s a particularly stark example, it’s not the only one. When rival BHP Group was struggling to sell an Australian colliery this year, the company surprised investors by applying to extend mining at the site by another two decades — an apparent attempt to sweeten its appeal to potential buyers.

Now, after years of lobbying blue-chip companies to stop mining the most-polluting fuel, there’s a growing unease among climate activists and some investors that the policy many of them championed could lead to more coal being produced for longer. Senior mining executives say the message from their shareholders is evolving to acknowledge that risk, and they’re no longer pushing as hard for blanket withdrawals.

Read more: https://www.bloomberg.com/news/articles/2021-11-09/investors-pushed-mining-giants-to-quit-coal-now-it-s-backfiring

Pimping coal mines this way in my opinion is a form of greenwashing.

The value of a mine is based on its potential future earnings. By attaching long term operating permits to the sale, mining companies are boosting the sale price by boosting confidence in long term operation, and in doing so are indirectly profiting from future coal extraction.

This grossly hypocritical position allows mining groups which publicly proclaim their divestment of coal holdings to effectively claim a share of the profit from future coal extraction at the mine they just sold, when the new long term operating permit elevates the sale price.

If companies with coal holdings genuinely wanted to shut down coal, they could simply gift ownership of the mines to Greenpeace or the WWF. But this would mean writing off all the profit they could have made from future coal sales, rather than sneaking future profits from coal onto their books via a clever accounting trick.

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Dennis G Sandberg
November 11, 2021 10:21 pm

The typical results of substantive liberal ventures into harassing the hydrocarbon industry are those troublesome unintended consequences.

chickenhawk
Reply to  Dennis G Sandberg
November 12, 2021 3:14 pm

Where are the moderators>>>>>>++

MarkW
Reply to  chickenhawk
November 12, 2021 3:54 pm

The last time these exact same posts were showing up here, it took many weeks to get rid of them.
In addition to pimping for for profit scam, we have the issue of the same text being posted by multiple names, which violates the rules about sock puppets.

TonyG
Reply to  MarkW
November 13, 2021 7:23 am

They also get past moderation and filters by posting something different first, THEN editing to the spam.

H B
November 11, 2021 10:59 pm

Sell it to a subsidiary or associated company got ya green tards

Mr.
Reply to  H B
November 12, 2021 12:08 pm

And ramp up the marketing of coal as an essential ingredient in making solar panels.

“See, we’re doing our bit in the move toward clean energy generation equipment”.

(and – “where’s our subsidy?”)

Bill Toland
November 11, 2021 11:24 pm

My experience of greens is that they aren’t the sharpest tools in the box. They are not good at arithmetic or seeing the long term consequences of their actions. So I am not surprised at this turn of events which was entirely predictable.

Geoff Sherrington
Reply to  Bill Toland
November 12, 2021 12:48 am

BT,
Yes, I have watched many of these green minds go from simple school kids in short pants to simple professors, no less, without gaining much wisdom or learning.
Now you see them regretting their free market manipulation as if they are just meeting enterprise concepts for the first time.
It will all be over sooner than you think, as high prices and blackouts of electricity teach old lessons anew. Geoff S

H. D. Hoese
Reply to  Geoff Sherrington
November 12, 2021 6:43 am

One of the ways this happens is making lab assistants or the equivalent out of graduate students to enhance their grant and publication enterprise. (Think journal statistical impact factors). May be a factor in marital problems, faculty hiring younger females with both somehow susceptible. I recently had a former graduate student bring this up without my ever mentioning it that might have observed this. Not all professors exploit students, would be an interesting statistic.

National Academy of Science may be almost getting to there. Was just given this on ignored papers whose importance was not recognized for several years. I know of one since 1855. Defining and identifying Sleeping Beauties in science. Qing Ke, et al., 2021. PNAS June 16, 2015 112 (24) 7426-7431.   https://doi.org/10.1073/pnas.1424329112

However that issue has a section on Sustainability Science listed under Social Sciences and another that might set the record for number of authors. When I first looked for it ran into this one in a recent issue that might be of interest. Thomas D. Albright. The US Department of Justice stumbles on visual perception. PNAS June 15, 2021 118 (24) e2102702118; https://doi.org/10.1073/pnas.2102702118

Barry James
November 11, 2021 11:25 pm

A very nicely played game of “Gotcha” by the mining giants. It’s great when the champions of the Left like Greenpeace get left with nothing in return for their coercive tactics and the ordinary people get to keep the benefits from coal that they need so badly.

Vincent Causey
November 11, 2021 11:42 pm

Gifting the ownership to these NGOs would be an interesting experiment in self restraint versus greed. How long before Greenpeace and WWF would start selling the coal, because, well you know, it’s “to save the planet”? Not long, would be my guess.

H.R.
Reply to  Vincent Causey
November 13, 2021 6:42 am

Or WWF and GreenPeas could just set the coal mines on fire so no one could ever mine the coal.

Oh wait……


Well, since their mission is to generate donations so they can keep their operations going to generate more donations and so on and on, you can trust them not to do anything concrete and useful for their purported missions.

Their actual mission is just to generate a continuing stream of donations.

John Garrett
November 12, 2021 4:15 am

Huh? What am I missing?

Any publicly owned company has a fiduciary obligation to their shareholders to obtain the highest possible price in any sale of a corporate asset.

MarkW
Reply to  John Garrett
November 12, 2021 3:56 pm

I believe the article is pointing out how the green warriors managed to miss the existence of this fiduciary duty.

Tom Abbott
November 12, 2021 4:54 am

From the article: “Investors Pushed Mining Giants to Quit Coal. Now It’s Backfiring

There’s growing unease that the divestment campaign could lead to more coal being produced for longer”

LOL !

These clever people turn out not to be so clever. There’s a lot of that going around.

Joseph Zorzin
November 12, 2021 5:06 am

Gee, how terrible, companies thinking about profits. Not like morally pure government labor unions and wind/solar companies who only think about saving the Earth.

Dean
November 12, 2021 5:06 am

Nothing wrong with taking action to increase the value of your asset.

The thing these divestment clowns fail to realise is that for every seller who thinks coal is bad, is a buyer who has the opposite view.

Dave Yaussy
November 12, 2021 5:35 am

Australia has coal. Other countries want coal. They are going to get together somehow, some way.

We are seeing fossil fuel reserves being sold to more and more smaller, private companies that don’t have to worry about shareholders. The net losers are people like me, who want to continue to invest in fossil fuels because we believe they will make money over the near and long term.

John K. Sutherland
November 12, 2021 5:42 am

Off the books, accounting at its best.

LdB
Reply to  John K. Sutherland
November 12, 2021 6:39 am

Not off the book private equity firms that can’t be pressured because they aren’t public.

Dennis
Reply to  LdB
November 12, 2021 10:18 pm

I have read various reports that lobby activist groups, including union effectively controlled superannuation funds in Australia, noting that the unions also make donations to the Greens Party, invest in publicly listed companies to be heard and to influence.

Some of the activist groups send hundreds of emails to the owners of businesses demanding that they stop advertising with private sector media businesses that employ people who are perceived to be their political enemies demanding that those people be removed and no longer heard/read.

Assets held in private companies makes good sense as a counter measure.

Olen
November 12, 2021 7:45 am

Mining is of course a business and the only reason for businerg is profit. When governent intentionally destroys a legal business a crime has been committed by government.

The responsibility of government and those who represent is for the benefit of the people and not for a destructive group of activists.

The dirty secret to good government is for politicians to depend on legal votes and not election fraud to stay in office.

lmo
November 12, 2021 7:49 am

Don’t these people understand how simple it is to get the world off of coal? Just invent the clean reliable power source that is cheaper than coal.

Of course that requires knowledge of how to do something beyond waving a sign and blocking traffic.

chickenhawk
November 12, 2021 3:16 pm

This is great news.

mmore coal for everyone!!

MarkW
November 12, 2021 3:52 pm

The best response to a scan, is a good counter scam.

Dennis
Reply to  MarkW
November 12, 2021 10:10 pm

Particularly a legal counter measure.

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