Miners back roadmap to reduced emissions

The Minerals Council of Australia will commit to ‘decarbon­ising’ the economy.

Minerals Council Chief Tania Constable in Canberra. Picture Gary Ramage

The lobby group representing Australia’s largest resources companies will commit to “decarbon­ising” the economy as it stares down pressure from its members to take more action on climate change.

The Minerals Council of Australia, which represents companies including BHP, Rio Tinto and Glencore, will on Monday endorse the Paris Agreement and release an emissions blueprint supporting the use of electric ­vehicles and renewable energy at mines across the country.

The stronger position on climate change follows a tumultuous period for the organisation, with BHP only late last year reviewing its membership because of the MCA stance on emissions reduction.

MCA chief Tania Constable told The Australian the climate strategy had been sparked by a “change in community expectations” and requirements for resources companies to be “more sustainable”.

The three-year climate action plan will include the use of new technologies on mine sites, the development of emissions-friendly automation, and the rollout of carbon capture, utilisation and storage.

Ms Constable said the plan would allow mining companies to remain competitive at a time when major financial institutions were becoming more reluctant to invest in sectors with high environmental risks.

The resources industry, which has operated through the COVID-19 pandemic and is credited with shielding the economy with annual export earnings of $290bn, devised the plan amid a climate change backlash from member companies’ shareholders and fund managers.

Black Rock chief executive Larry Fink in February. Picture: Jane Dempster

In January, BlackRock — which has almost $US7 trillion in funds under management — said it would make sustainability and climate risks key parts of its investment strategy. “Climate change has become a defining factor in companies’ long-term prospects,” BlackRock chairman Larry Fink said at the time.

“But awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance.”

BHP and Rio Tinto have also come under shareholder pressure to adopt tougher climate change policies. So far, both have bucked that pressure.

Ms Constable said the climate action strategy was not a “statement … it’s an actual plan”.

“This is a time for action, instead of vague virtue-signalling about future ambitions without the courage to outline concrete plans,” Ms Constable said.

“While we’ve made steady progress as an industry to address climate change, there’s much more to do given that climate change will continue to present strategic, financial, physical, and reputational risks, as well as opportunities for our sector.

“Sustained climate action … is required to reduce the risks of human-induced climate change and to support worldwide decarbonisation as we transform to a lower-emissions future.”

The mining sector’s climate change agenda comes ahead of the Morrison government finalising its technology investment road map, a major part of its emissions reduction plan, which will rely heavily on private-sector support.

On zero net emissions targets, Ms Constable said there was no firm sector-wide deadline with member companies working on their own timelines.

Rio Tinto supports a 2050 target to reach zero net emissions across its operations. Under the plan, the industry will establish an online registry detailing the sector’s “climate-related collateral” and will consider allowing public access to the database.

‘Australia’s technology road map will guide future investments in low-emissions technology’: Minister for Resources Keith Pitt. Picture: AAP

The plan, described by the MCA as a “world first for the minerals sector”, will also “support the development of cleaner-­energy options”, including critical minerals and tackle “global procurement practices”.

Resources Minister Keith Pitt said the sector had a “long-term future”. Mr Pitt said the mining industry would “underpin the energy investments needed for economic recovery here in Australia and overseas after the COVID-19 pandemic”. “Our advantages include high-quality coal for use in high-efficiency, low-emissions power stations, the feedstock for a gas-fired manufacturing recovery, and the building blocks for renewables and hydrogen investment,” he said.

“The Australian government’s technology road map will guide future investments in low-emissions technologies. A long-term plan will ensure Australia makes the most of our energy resources which will be more important than ever to create new jobs.”

Ms Constable said that with more than 1.1m people directly and indirectly employed in the resources industry, it was crucial for the sector to take leadership and enable a “multiplier effect”.

“The climate action plan will not get us to where we need to be overnight and it does not hold all the answers on how the sector must decarbonise — but it does prepare us well to reduce emissions in the short term and ultimately drive them to net zero in the longer term,” she said.

“This is not just my view; many senior mining executives regard pragmatic and effective climate action as an economic opportunity, especially in accelerating mineral developments to support climate-friendly technologies.”

The government’s technology investment road map will anchor Australia’s long-term emissions-reduction strategy, which will be released ahead of next year’s UN Climate Change Conference in Glasgow.

Energy Minister Angus Taylor last week approved $3.3m in funding for a feasibility study into a proposed high-efficiency, low-emissions plant in the central Queensland town of Collinsville. The Australian earlier this month revealed Shine Energy, the company pushing the Collinsville plant, wanted the project to be exempt from the Paris Agreement.

On Monday, Mr Taylor will launch a $10m grant program in Bodalla — located in the Eden-Monaro electorate — supporting dairy farmers in reducing emissions and lowering power bills.