Mar 24, 2021

Coal India to invest $1.73bn in solar power projects

Coal India
solar power
Daniel Brightmore
2 min
Solar
The world's largest coal miner eyes further mine closures while planning foray into solar wafer manufacturing...

Coal India Ltd, the world’s largest coal miner, could venture into solar wafer manufacturing and wants to “aggressively” participate in the country’s solar energy auctions, its chairman told Reuters.

Pramod Agarwal said its joint venture with state-run NLC India Ltd plans to invest around 125 billion rupees ($1.73bn) in solar power projects with a capacity of 3,000 megawatts, of which Coal India will invest some 60 billion rupees by March 2024.

At the same time, it plans to keep closing small mines and stay away from opening those that would entail mass hiring, Agarwal said. The group closed 82 mines in the three years to March 2020, resulting in cuts to its workforce of 18,600 employees.

“Coal as you know, we’re going to lose business in the next two, three decades. Solar will take over (from) coal slowly as a major energy provider in the coming years,” Agarwal said in an interview.

“We are just exploring the possibilities where we can invest in solar wafer production, nobody is (currently) there in the country,” he said.

India, which makes solar cells and modules but not wafers, is planning to levy customs duties on some solar equipment from April 2022 as it looks to expand local manufacturing capacity.

Agarwal said the company’s steadily falling headcount would lead to a major reduction in costs. “The net reduction of employees is to the tune of 13,000 to 14,000 per annum,” he said.

State-run Coal India will face increased costs due to periodical wage revisions for non-executive employees, effective from July 1, 2021.

“But manpower reduction will have a stabilising effect, so the wage bill effect may be flat,” Agarwal said.

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Jul 22, 2021

BHP deliberates ditching fossil fuels for greener mining

mining
BHP
Fossilfuels
Sustainability
3 min
BHP are discussing the possibility of pulling out of a multi-billion dollar contract to distance themselves from fossil fuels and aim for greener materials

The world’s biggest miner, Australian-based BHP, is supposedly considering withdrawing from a multi-billion dollar contract, which would see the company generate more than US$2bn due to mounting pressure over aligning its business with ongoing climate concerns and ESG-compliance measures.

Exiting the agreement would mean BHP escalate its distancing from oil and gas and subsequently cut down on the amount of fossil fuels used by the company when mining. 

It’s estimated that the petroleum business being debated upon could actually be worth around US$15bn but is still under talks to be put up for sale. 

Global Mining Giant Considers Greener Future

BHP has made itself clear that it wants to avoid becoming unable to sell its assets. As competition within the market increases following higher numbers of oil giants wrestling with investors to deal with climate pressure, so too are the number of mining rivals looking to make environmental changes for the future. 

However, BHP currently has the upper hand as a stalwart mining company that established itself back in the 1960s, allowing it the time to grow and dominate over other fast-appearing mining competition. 

Mike Henry, BHP Chief Executive, has an optimistic outlook for the future of oil and gas despite worries over rising demand to align his business with the Paris Climate Agreement. Henry argues that prices remain promising due to a lack of industry-wide investment. 

BHP’s petroleum business won’t be easy to say goodbye to. Forecasted to generate around 6% of profits during the ongoing financial year (US$2bn), and around US$1.6bn revenue produced by BHP petroleum in the six months leading to December 2020, BHP is due to take a hit no matter what agreement they choose. 

On the other hand, distancing itself from thermal coal and petroleum would arguably aid the company’s case to possible - and valuable - investors who may be required to fund BHP’s increased output to places such as Australia and Mexico in the near future. 

BHP considers cutting billion-dollar contract to aid climate

An exit away from petroleum has the potential to be “a powerful corporate catalyst,” says Dominic Kane, Analyst at JP Morgan

“We believe an exit would likely ring-fence BHP’s exceptional cash flows for non-fossil fuel organic growth, mergers and acquisitions and generous shareholder distributions since BHP could avoid a major new capital investment phase this decade in petroleum.”

BHP is also set to sanction a giant US$5.7bn Canadian potash mine in August of this year, already seeing potash as a long-term substitute for gas and oil going into the future. The company has also previously announced plans to abandon its 80% share in its joint endeavour with Mitsui, owner of two lower-quality mines in Queensland, Australia. 

BHP is scheduled to report its annual results on August 17, after which it may become clearer on whether the company will choose to focus its shift to a low-carbon economy or whether it will stay with its current contract into the coming year.

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