A few years ago, coal production was, well, in the pits. Then Covid-19 struck, lockdowns came in, and demand in general went on the slide. Coal mining, it seemed, was a sunset industry.
Rio Tinto (RIO) was first to quit. The intention of Jean-Sébastien Jacques, the then chief executive, was to make the group “leaner and greener” with a focus on iron ore, aluminium, copper and bauxite. It got out of coal in 2018 with the sale of its Kestrel mine in Australia. This opened the door for investors with an aversion to coal to take a fresh look at Rio, but the group’s ethical credentials came unstuck with its grab for a high-grade iron ore deposit in Australia’s remote (but sacred to Aboriginals) Juukan Gorge. After Jacques’ downfall in January 2021, his successor, Jakob Stausholm, came in with a new broom. The report he commissioned on Rio’s internal culture undermined its ethical standing as well. The findings were shocking. The macho culture across its worldwide operations involved systemic bullying, sexual harassment and racism. Mining, it seems, is a dirty business in more ways than one. But Rio can’t be alone. Other companies may wish to take a long hard look at themselves too.
Anglo American (AAL) may have cut its exposure to coal because its long-serving chief executive, Mark Cutifani, wished to leave a cleaner slate for his successor, Duncan Wanblad. He retained the group’s investments in the mining of metallurgical coal, which is needed for the manufacture of steel, but disposed of its thermal coal production. This has helped Anglo reduce its global carbon dioxide emissions; it had also lost $15mn (£12mn) in 2020 on its South African thermal coal operations. They were spun off in June 2021 as Thungela Resources (TGA). This, together with the agreed sale of Anglo’s stake in the Cerrejón coal mine in Colombia (which exports high-quality thermal coal to Europe), helped to secure Cutifani a £2.2mn bonus in 2021.