Coal miner Whitehaven has been grilled by climate activists at its annual investor meeting about the resilience of its business against forecasts of a sharp downturn in coal demand by 2030.
Whitehaven, like all producers of the heavy-emitting fossil fuel, is vulnerable to the accelerating transition away from coal in favour of cleaner energy as governments and utilities phase out coal-fired power generators in favour of gas and renewables.
The pure-play Australian coal miner, the first to report its prospects against climate risks under globally accepted guidelines, last year said its future was “robust over the long term”, citing its exposure to developing Asian nations and the projected demand growth for coal with higher energy value and lower impurity levels.
However, with the International Energy Agency’s latest outlook report, published last week, sharply revising down projected coal demand by 2030 and beyond, Whitehaven chairman Mark Vaile was quizzed by climate activist group Market Forces at the company’s shareholder meeting on Thursday about the implications of the new forecasts.
Mr Vaile said Whitehaven had not yet analysed the agency’s outlook or weighed the business risks of its differing scenarios, but would do so shortly.
“As we do each year, we will examine the report thoroughly and systematically and consider the implications,” he said.
Market Forces, an arm of environmental activist organisation Friends of the Earth, lodged a resolution at the meeting calling for detail on how the miner would wind down its coal operations in line with the goals of the Paris climate accord to limit global warming.
However, just 4 per cent of Whitehaven’s shareholders supported the move.
Market Forces campaigner and legal analyst, Will van de Pol, said many large investors had already “voted with their feet” and had sold down their holdings in the company. Superannuation funds, in particular, have been moving to screen out producers of thermal coal.
“Even amongst remaining investors, there is clearly some recognition that the best outcome would be for Whitehaven to plan for and manage the wind-up of its coal operations in line with globally agreed climate targets,” he said.
Mr Vaile, who had urged investors to vote down the resolution, said the Paris agreement did not dictate to signatories how emissions reductions should be achieved. “It is a misrepresentation to suggest it requires Whitehaven to wind up its production assets,” he said.
Following a record-breaking profit result a year earlier, Whitehaven’s earnings crashed 95 per cent from $564.9 million to $30 million in the year to June 30 as the pandemic-driven economic downturn suppressed global energy demand and the prices of coal. The benchmark price for top-quality New South Wales thermal coal exports fell from $US68 a tonne to $US55 in the June quarter, far below the average of nearly $US100 a tonne in the 2019 financial year.
Whitehaven told investors on Thursday it was seeing signs of recovery, as the price rebounded to about $US60 a tonne, and projected coal demand would rise as governments unleashed economic recovery plans requiring coal use for energy and steelmaking.
“Every government around the world will be engaging in some form of stimulus in order to re enliven some of the economic activity lost because of COVID-19,” Whitehaven chief executive Paul Flynn said.
“Energy is fundamental to stimulus, as is steel, and I think that will play out over the next six to 12 months.”
Source: Thanks smh.com