Minerals Council of Australia launches new energy policy following threat of BHP exit

The Minerals Council of Australia’s new energy policy supports a measured path to lowering emissions.

A coal handling facility Newcastle.

The Minerals Council of Australia has launched a new energy policy in the face of BHP’s threats to leave and activist shareholders targeting its second-largest member Rio Tinto.

The new policy, which updates one formed in 2012, calls for reliable and affordable power to be a priority on the path to lower emissions.

It says any new policy should aim to cut energy prices and retain a focus on securing reliable dispatchable, baseload power to be a feature of any new policy.

“The minerals industry acknowledges that sustained global action is required to reduce the risks of human-induced climate change,” the MCA policy says.

“The Australian minerals sector supports a measured transition to a low emissions global economy.”

BHP last year publicly threatened to leave the MCA if it continued what BHP said was promotion of cleaner coal-fired power over other sources and a prioritisation of affordability and reliability over emissions reduction.

It is not clear yet whether BHP, which is a net beneficiary of higher east coast energy prices because of its Bass Strait gas business, supports the new policy.

But it is understood BHP was consulted during its formation.

MCA members make up about 15 per cent of east coast power demand.

Rio, which has sold out of thermal coal, is facing a shareholder resolution at its upcoming AGM asking it to review the climate policies of the industry groups it belongs to.

“Reliable and affordable energy is central to our economy,” the MCA policy says.

“Policy measures must deliver reliable and affordable energy at least cost while putting Australia on a pathway to meeting its emissions reduction targets.”

The MCA said the National Electricity Market (which serves the eastern states) was facing challenges including the erosion of baseload power capacity that is already hitting business and household bills.

“The MCA believes a technology-neutral approach should be adopted for all low emissions energy sources where no one technology is favoured to the exclusion of others,” the MCA policy says.