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Seven reasons why BHP — a giant coal miner — wants to stop lobbying FOR coal

BHP is throwing its weight around to stop the Minerals Council of Australia (MCA) saying what most miners want on climate change.

bhpbilliton. minerals council.

What coal company wants lobbyists not to lobby for coal?

The gauntlet is down — Which heavyweight will blink first?

In one corner — The MCA — the main lobby group for miners. It’s very effective, and wants to dump the renewables target (“yay” say most miners!). In the other corner — BHP –which has just threatened to quit unless the MCA stops being skeptical of climate change.

Thing is, BHP is the largest member of the MCA, providing 17% of the funding. The colossal miner is so big, it can do its own deals. Essentially, the Minerals Council needs BHP more than BHP needs the Minerals Council. BHP is testing it’s power.

A tough test for the MCA

In Australia, the MCA is influential enough that their fierce anti-mining tax campaign helped to bring down a Prime Minister and when industries want to threaten governments they talk of running a campaign “like it”.

If they fold and serve their largest client, effectively burning off almost all their smaller clients, then the smaller clients should quit and form their own new entity. They provide 80% of the MCA funding, and for the MCA not to lobby for Australia’s second largest export industry is bonkers.

The world’s biggest miner BHP said Tuesday it would leave the World Coal Association and review its membership of the US Chamber of Commerce membership to show support for action on climate change.

BHP said it also disagreed with the US Chamber of Commerce’s rejection of the Paris Agreement and a carbon-pricing policy, and would decide on whether to leave the organisation by March.

The miner said it would remain in the MCA as the firm was still benefiting from its membership, but threatened to quit the Australian group if it did not refrain from lobbying in favour of coal power.

BHP is a coal miner — so why does it want the main miners lobbyist to NOT lobby for coal?

Do the test: Either BHP cares about the environment, or … it has more to gain from being “fashionable” on climate and pandering to bigger powers. Follow the power chain. The government is the largest entity now in any western nation. There are huge advantages in favors from governments on offer here, and banks too. BHP is so big it has private meetings with Prime Ministers to create policies that might theoretically be not be so friendly for smaller competitors. BHP is so big it uses 120 megawatts just at Olympic Dam (about 5-10% of the total power supply in South Australia). It’s so big that it can even float the option of running its own coal plant, though it may work out cheaper if the Australian taxpayer builds an interconnector to black coal in NSW. The rules are different for a player this size.

Seven advantages to BHP:

  1. This sabre rattling costs very little. BHP earned 18% of its profits from coal. Battling coal in Australia won’t hurt its coal sales, but it will help the rest of the conglomerate group pull strings to get better deals. The rest of BHP’s profits come from iron, petroleum, and copper. (See p. 12 of The Annual Report.) Most of their customers are in Asia (77% of total sales), so BHP can keep selling coal to China no matter what governments in Australia do to screw Australian electricity consumers. (See p. 67 of the BHP Annual Report.)
  2. They buy favors with both Labor and Liberals (because “what’s the difference” — both parties have leaders that want “climate action”). Tax rules, labor laws, and big-government decisions make far more difference to BHP’s bottom line than any losses on coal sales in Australia.
  3. The earn favors with big banks, who want to profit from a new global fiat carbon currency. Would you like a cheap loan?
  4. They get the green-monkey off their back. One less headache, and they get “nice” media from pandering journalists.
  5. They help keep competitors down (like Adani –opening new coal mines is harder than keeping old ones open in the current political climate).
  6. They own Olympic Dam, the world’s largest uranium deposit. Climate fear improves the prospects for nukes. It sure doesn’t hurt.
  7. Corporate execs living in inner Sydney and Melbourne will get more dinner party invitations for pandering to Green Gods.

If BHP control the Minerals Council they can demand even better deals on all kinds of tax and legal arrangements. (See what happened after the Resource Rent Tax campaign.) All they have to do is tell ShortenTurnbull (Turnborten?) that they will set the Minerals Council on them if XYZ clause is not added to the new policy.

If the MCA caves here it shores up BHP’s already immense power, and shows the MCA is merely the tool of BHP. Can all the other miners afford that?

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