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Abu Dhabi, UAEWednesday 20 March 2019

Coal giant BHP buys into firm that cleans air of CO2

The miner will pay $6m for a stake in Canada's Carbon Engineering that has been removing emissions from the atmosphere since 2015

Mining major BHP is pushing on with a bid to become more environmentally friendly. AP
Mining major BHP is pushing on with a bid to become more environmentally friendly. AP

The world's biggest coking coal producer BHP has bought a $6 million (Dh22.04m) equity stake in a Canadian company that captures carbon dioxide from the atmosphere, as mining companies increasingly try to become sustainable and retain ethical investors.

UN scientists said last year that temperature rises could only be kept under control if more radical actions were taken, including adopting lifestyle changes and technologies that capture and remove CO2.

BHP, the only company among the major miners, has a target of net zero emissions by the second half of the century, in line with UN carbon-cutting goals.

It is a huge challenge, especially if the emissions caused by the amounts of coking coal and iron ore BHP sells for steel-making are included.

Canada's Carbon Engineering has been removing emissions from the atmosphere since 2015 at a pilot plant in British Columbia and converting it into fuel since 2017.

BHP said the air-capture technology had the potential to deliver large-scale negative emissions.

"We hope that this investment can accelerate the development and adoption of this technology," said BHP vice president, sustainability and climate change, Fiona Wild.

CE's chief executive Steve Oldham said BHP's global reach and experience of complex projects made it "an ideal partner" as the company seeks to deliver affordable, carbon-neutral fuels and emissions cuts.

Oil and gas companies are also acknowledging the scale of the challenge, especially as pressure mounts on them over downstream emissions from burning products, and not just those caused by their regular operations.

BHP's equity stake in CE follows the investment of an undisclosed sum announced in January from a subsidiary of Occidental Petroleum and Chevron's venture capital arm. Billionaire philanthropist Bill Gates is also a supporter.

Technology to capture emissions adds to costs and has struggled to find corporate investors. Even the relatively established technology of carbon capture and storage, which gathers and buries emissions released by power generation, for instance, has struggled for years.

Financial analysts are even more sceptical about direct capture from the atmosphere, although scientists say it could help curb global warming, which is blamed for causing more heatwaves, wildfires, floods and rising sea levels.

Mining companies are under particular pressure to prove their ethical and sustainable credentials after a fatal dam burst in Brazil in January has heightened investor scrutiny.

Glencore, the world's biggest producer of seaborne coal, said in February it will cap coal production and last week named climate change in a revised list of the risks it faces.

It was a surprising about-turn by a company that has spoken glowingly of coal in the past and snapped up major Australian mines from rivals that were exiting the industry, according to Bloomberg.

The acknowledgments indicate that businesses are aligning on climate change in ways that will reshape energy and mining for years to come, even with US President Donald Trump steadfast in his commitment to expand the coal industry. The anti-coal movement has already led the biggest miners in the world to exit the business or pledge not to invest, and oil producers have vowed to cut greenhouse gas emissions.

“We’ve been going through all the issues, it’s been a lengthy period,” said Glencore chief executive Ivan Glasenberg. “We have found a resolution where both parties are happy, it makes sense, we think we’re doing the right thing.”

Updated: March 5, 2019 02:11 PM

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