Visitor essay by Eric Worrall
Market Forces, an Affiliate of Associates of the Earth, needs regulators to smack New Hope Mining for claiming coal is right here to remain. However New Hope have quietly challenged the viability of all the renewables trade, in an official firm doc. If this goes to court docket, purchase loads of popcorn.
New Hope mining firm referred to Asic, accused of deceptive traders over way forward for coal
Investor motion group Market Forces says coal firm is ‘constructing a monetary home of playing cards’ by telling shareholders coal will stay ‘vital’ in vitality combine
Ben Smee @BenSmee
Wed 21 Jul 2021 14.20 AEST
Shareholder activist group Market Forces has requested the company watchdog to research whether or not coal firm New Hope misled traders by claiming that coal would “stay a major a part of the vitality combine”.
In letters despatched to New Hope Company and the Australian Securities and Investments Fee, legal professionals for Market Forces have alleged that statements by the corporate’s chief govt, Reinhold Schmidt, might quantity to “deceptive and misleading conduct” beneath the Companies Act.
In September final 12 months Schmidt informed the Australian Monetary Assessment that “thermal coal is a part of the long run vitality combine, it’s going to at all times be there”.
On the firm’s annual basic assembly the next month, Schmidt’s was requested whether or not he stood by that assertion. He responded by referring to the Worldwide Vitality Company’s forecast “present insurance policies” and “said insurance policies” eventualities.
“If you happen to take a look at [those scenarios] coal will stay … a major a part of the vitality combine. Australia has acquired a really robust profit when in comparison with different coal producers; our coal is of higher high quality and my statements stay unchanged.”
In its letters, Market Forces says these statements omitted that the IEA had certified its forecasts by pointing to “vital uncertainties, together with extra fast motion to part out coal”.
Learn extra: https://www.theguardian.com/australia-news/2021/jul/21/new-hope-mining-company-referred-to-asic-accused-of-misleading-investors-over-future-of-coal
From the Market Forces web site;
ASIC investigation requested into New Hope statements
21 July 2021
Playing on failure of the Paris Settlement
The vitality demand eventualities New Hope depends upon to justify its future enterprise prospects are in keeping with world warming of round 3ºC. This might result in catastrophic ecological, social and financial penalties, and gambles on the entire failure of the Paris Settlement, which goals to restrict world warming as shut as doable to 1.5ºC.
As of July this 12 months, 191 nations have ratified the Paris Settlement, whereas nations representing over 50% of the worldwide economic system have dedicated to internet zero emissions by 2050 . In response to the IEA’s most up-to-date report (Internet Zero by 2050: A Roadmap for the World Vitality Sector), no new coal mines or expansions can proceed and coal demand should plummet so as to obtain internet zero emissions by 2050 .
Actively increasing the coal trade
At a time when coal corporations must be winding up their operations, New Hope is actively increasing the coal trade by way of its proposed $900 million New Acland Stage three coal mine – a 12 12 months growth to the prevailing mine that might produce over 170 million tonnes of carbon emissions  and see three huge open-cut coal pits dug on the prime agricultural land of the Darling Downs.
Moreover, media reviews counsel New Hope could also be bidding to buy BHP’s Mt Arthur coal mine, one of many greatest thermal coal mines in Australia . New Hope just lately raised $200 million of bonds, “for basic company functions, which can embody additional progress growth and opportunistic M&A [(merger & acquisition)] exercise” .
Learn extra: https://www.marketforces.org.au/asic-investigation-requested-into-new-hope-statements/
Ought to New Hope have stated extra concerning the sovereign dangers to its enterprise mannequin?
Given even France is failing to fulfill its Paris Settlement commitments, in response to a French court docket ruling, absolutely it may very well be argued in any future court docket case that the Paris Settlement is a political fantasy.
There are sovereign dangers, which New Hope acknowledges; In response to New Hope Coal Annual Shareholders Report 2020, … One main headwind for the Firm is the continued reluctance of the Queensland Authorities to approve the New Acland Stage three venture, regardless of overwhelming neighborhood help, and the financial injury being wrought on the State by COVID-19. New Hope first utilized for Stage three approvals in 2007 and has been locked within the course of by anti-coal activist teams since then …
However New Hope has additionally laid out a problem to all the renewables trade, in that very same annual shareholder report.
… As soon as once more, throughout a interval of low pricing within the coal enterprise, we see activists take the chance to foretell the tip of the trade, pushing for his or her most well-liked resolution of renewables which, right now, can not economically or virtually displace fossil fuels. In response to the 2020 BP Statistical Assessment, in 2019 coal consumption declined, however nonetheless accounted for 27% of major vitality provide. Regardless of appreciable progress, renewables accounted for simply 5% of provide. In electrical energy era, coal’s share decreased however nonetheless accounted for 36%, effectively above the following hottest gasoline which was fuel at 23%. Renewables grew from 9% of electrical energy era in 2018 to 10% in 2019. Coal’s decline in 2019 was not simply on account of a rise in renewables, but additionally to the rising competitiveness of fuel within the gasoline combine. Coal use declined strongly within the US and Western Europe however was largely offset by will increase in Asia. The Worldwide Vitality Company’s World Vitality Outlook 2019 Present Insurance policies State of affairs has steam coal use rising considerably from present ranges by to 2040, while the Acknowledged Insurance policies situation has steam coal use staying comparatively flat by to 2040, with over 80% of steam coal demand being within the Asia Pacific area …
Learn extra: New Hope Coal Annual Shareholders Report 2020
I strongly suspect Associates of the Earth will realise they’ve bitten off greater than they’ll chew, and that they’ll quietly slide again into their gap once they come to their senses.
However perhaps we’ll get fortunate, and Associates of the Earth will proceed their self damaging assault.
As a result of New Hope Mining has carried out what we have now all been ready for – they’ve quietly challenged all the renewables trade, by explicitly declaring the falsehood of claims that renewables are a viable alternative for fossil gasoline in an official firm doc.
If Australia’s ASIC regulator makes an attempt to prosecute New Hope, the difficulty will find yourself as a court docket case which may drag in different corporations, as New Hope defends its declare that renewables are usually not a viable alternative for coal.
If New Hope wins, it may up-end all the Australian renewables trade, by opening the door to a stream of counter fits, official complaints to ASIC about wild claims made within the official company paperwork of inexperienced vitality corporations.