Japan’s Mitsui may sell stake in Australia thermal coal mine

Image courtesy of Bengalla Mining Company

TOKYO, Oct 31 – Japanese trading firm Mitsui & Co Ltd may sell its stake in an Australia thermal coal mine in the face of growing pressure to divest coal assets amid mounting concerns over climate change, its chief executive officer said on Wednesday.

“We’ve made it clear that we won’t invest in new thermal coal mining projects,” Mitsui President and Chief Executive Officer Tatsuo Yasunaga told analysts.

“We will consider selling our stake in an Australian mine which produces only thermal coal if there is a good opportunity,” he said.

We are committed to bring our energy mix toward more carbon-free direction – Mitsui CEO Tatsuo Yasunaga

For Mitsui, Bengalla in Australia is the only coal mine it owns a stake in which produces only thermal coal, a company spokesman said. Mitsui owns 10% in the mine.

The trading company has said it would trim its thermal coal assets in the long term amid growing pressure worldwide for companies to cut reliance on the fossil fuel but would continue to invest in coking coal – a key raw material for steel-making.

Yasunaga said its thermal coal output from its shareholding may not fall immediately as its Mozambique’s Moatize coking coal project is ramping up and producing thermal coal as a byproduct.

Its annual coal output, including coking coal, from its shareholding is expected to rise to 14 million tonnes in the year to March 2019, up from 12.8 million tonnes a year earlier, but the figure is projected to fall to 11 million tonnes the following year, according to its document for investors.

Rival Marubeni Corp said in September that it would halve its net coal-fired power generating capacity by 2030 to reduce its greenhouse gas emissions.

Under a goal unveiled in July, Mitsui also aims to double the ratio of power generating capacity from renewable energy to 30% in its total capacity by 2030 while cutting the portion of coal-fired power.

The moves come as a growing number of companies and pension funds worldwide are divesting assets or companies that generate revenues from fossil fuels, especially coal.

Mitsui’s total net power generating capacity stood at 9.1 GW as of September, with coal-fired power accounting for 22 percent, gas-fired power 62 percent and renewable 16 percent.

(By Yuka Obayashi; Editing by Vyas Mohan)

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