BHP seeking thermal coal exit, profit slips amid virus hitChristian Fernsby ▼ | August 18, 2020
BHP attributable profit of US$8.0 billion and Underlying attributable profit was US$9.1 billion broadly in line with the prior year.
Net operating cash flow was US$15.7 billion, above US$15 billion for the fourth consecutive year, and free cash flow of US$8.1 billion.
BHP has confirmed it is seeking to exit thermal coal mining globally and offload some its metallurgical coal mines in Queensland in a bid to remove risk from its portfolio.
After months of signalling it is open to the prospect of exiting thermal coal, BHP said that it is looking at options to exit its thermal coal assets at Mt Arthur in NSW and the Cerrejon project in Colombia, which together account for about 3 per cent of revenue.
It also said it was looking to exit its BHP Mitsui Coal joint venture, which mines metallurgical coal in Queensland.
BHP chief executive Mike Henry said "We are moving to concentrate our coal portfolio on high quality coking coals, with greatest potential upside for quality premiums as steel makers seek to improve blast furnace utilisation and reduce emissions intensity."
Thermal coal is the heaviest polluting fuel and the focus of rising investor pressure in response to concerns surrounding its contribution to global warming.
BHP's rival Rio Tinto, the world's second largest miner, has already removed all exposure to thermal coal while Anglo-American earlier this year said it intended to offload its thermal coal assets in the coming years. ■