By Clyde Russell Launceston/Australia
It’s not quite yet pistols at dawn but Rio Tinto’s polite warning to mining lobby groups that they have to acknowledge the threat of climate change is likely a sign that the industry will inevitably fracture into two camps.
These factions could be described as the “green” miners, who produce the minerals essential for the transition from the age of oil to the age of electricity, and the “dirty” miners who remain trapped in coal and other minerals deemed unnecessary for a carbon constrained future.
Rio Tinto’s carefully worded statement on industry associations, released last week, said that it would only work with groups aligned with its own climate principles.
These include a commitment that “any advocacy on the use of coal in the long term will note that it will require advanced technology, and in the medium to long term must be consistent with Paris targets.” The world’s second-biggest miner also said that mining lobby groups should argue against public subsidies for coal and advocate for energy supply to be done in a “technology neutral; way.”
Rio Tinto has effectively put mining industry lobby groups on notice that they need to adapt to a world in which the challenge of climate change is recognised and that mining should be a positive force for change.
While other mining groups, notably BHP Group, have also spoken out against the climate denialism that is still prevalent in some of the industry, Rio Tinto appears to be a step ahead in insisting on meaningful change.
The Minerals Council of Australia has now changed its view to argue that “sustained global action is required to reduce the risks of human-induced climate change.”
This contrasts with its position in July 2017 that new generation coal-fired power plants would reduce Australia’s emissions by replacing older, more polluting generators.
But even if the industry groups do tone down their anti-climate change rhetoric, it will become increasingly hard for them to represent the different ends of the mining scale.
For example, why would a miner of lithium, cobalt or copper in a well-regulated jurisdiction such as Australia, Canada or Chile want to be represented by the same people who also advocate on behalf of a thermal coal miner.
Miners who want to be seen as ethical, environmentally responsible and providing the raw materials for batteries and solar panels may also baulk at the idea of being lumped in with companies that operate in countries with questionable governance, weak environmental enforcement or where child labour and unsafe mining practices can occur.
The mining industry is starting to come under more intense pressure from investors who are demanding sustainable and ethical mining.
The collapse of a tailings dam at an iron ore mine in Brazil operated by Vale, with the loss of an estimated 300 lives, sparked a coalition of ethical investors to write to 683 listed resource companies asking for them to make public within 45 days information on their facilities.
It’s going to become increasingly common at company annual general meetings for investors to demand what action mining firms are taking when it comes to offsetting carbon emissions.
The mining industry as a whole has been slow to recognise that it doesn’t matter what each individual mining executive or board of directors believe, it matters what the investing public believes, and the weight of evidence is that climate change is increasingly featuring in investment decisions.
Rio Tinto, with its focus on iron ore and copper, may be able to successfully re-brand itself as a green miner, given the key role of copper in electric systems and the need for steel in many renewable technologies.
However, other major miners, such as BHP and Glencore, may struggle given they both have sizeable positions in coal within their portfolios, even if they do also mine resources needed for the battery revolution.
How they balance the pressure they will no doubt be subjected to against the profits from coal will be a challenge for their executives.
For pure coal miners, they will likely have a choice between accepting their industry associations are not going to lobby much on their behalf, or strike out on their own and form dedicated bodies to advocate their interests.
* Clyde Russell is a columnist for Reuters. The views expressed are those of the author.
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