BHP has moved further down its promised exit from the thermal coal industry by selling its stake in the huge Cerrejon steaming coal mine in Colombia in a deal worth nearly $US600 million.
Partner Glencore is buying the combined 66.66% stakes of BHP and Anglo American in the mine
Glencore agreed buy the shareholdings for about $US588 million. Of the total, both the mining companies will receive about $US294 million for their 33.3% respective interests in the Colombian mine.
The agreements are inter-conditional on each other and set to close in the first half of calendar 2022, subject to regulatory approvals.
Anglo American’s disposal of its stake in the mine marks the completion of its exit from thermal coal operations, as Glencore further commits to coal.
Glencore Chief Executive Ivan Glasenberg claimed in a statement that divesting fossil fuel assets will not lead to lower emissions.
The company said it “strongly believes” that assuming control of the Cerrejon is in line with its commitment towards a responsibly managed decline in its coal portfolio and will not comprise its climate targets.
The current mining concessions at Cerrejon are set to progressively expire by 2034, with production volumes to begin a material decline from 2030.
Moreover, Glencore further bolstered its commitment to climate goals by raising its medium-term absolute total emissions reduction target to 50% from 40% by 2035, compared with 2019 levels. It also introduced a new short-term target of a 15% reduction by 2026 on 2019 levels.
BHP has announced plans to exist the thermal coal sector. It is looking to sell the company’s Mount Arthur thermal coal mines in the Hunter Valley of NSW.
Glencore has thermal mines in the same area and would be a logical buyer after this deal.
The Colombian sale comes 10 months after BHP CEO, Mike Henry revealed plans to quit mining thermal coal as part of a push to clean up the company’s assets and better-position the business for a lower-carbon future.
