Miners must face climate change issues
IT’S been a hard road to recognising the new reality of climate change for Australia’s mining industry. And unwanted publicity — such as Australia being named as the world’s biggest emitter of greenhouse gases on a per capita basis, thanks largely to its reliance on coalbased power generation — hasn’t helped matters.
But the Minerals Council of Australia says a fundamental shift in mining industry attitudes to climate change has taken place in the past five years or so, and the industry is now keen to meet the challenges head-on.
I think there was a certain degree of headin-the-sand stuff even five years ago,’’ says MCA chief executive Mitch Hooke. But I don’t know anyone in the mining industry who seriously contests the concept of global warming these days, even if they doubt its magnitude or impact.
Even where there is scepticism there is also precaution — you don’t need the science to hit you in the face with the problem before you do something about it.’’
Sustainability and economics are key to understanding the industry’s about-face.
Any mining company that has not got climate change on its radar as part of its risk management strategy has gone AWOL,’’ Hooke says. The industry has moved on big time — it now defines its whole raison d’etre in terms of a contribution to sustainability.
You just can’t ignore the most fundamental shift in economic activity globally since trade liberalisation.’’
The MCA is advocating a four-pronged industry approach to climate change — ensuring Australia’s climate change policies form part of a global protocol, support for market-based mechanisms such as emissions trading schemes, pushing for a streamlining of state-based climate change responses and critically, supporting the development of new technologies such as clean coal solutions.
Technological advances are the key to the industry’s future, says Hooke, who is pleased at the noises coming from the Rudd Government in this area. ‘‘ We were delighted with Rudd’s pre-election commitment to a Clean Coal Fund, and we want to keep the momentum up,’’ he says. ‘‘ The development of these clean coal technologies has got to be a partnership between industry and government because that’s the only way they’re going to be achievable.’’
Chief among them is carbon capture and storage, or geosequestration — burying excessive carbon dioxide under the ground. Hooke says the technology has already been implemented at 15 different locations worldwide, although he concedes none of these is a largescale power generation plant. ‘‘ That’s the challenge, but I think we’ll get there,’’ he says. ‘‘ The reality is we don’t have a lot of choice because you just can’t put in enough windmills and enough solar panels and enough wave power — nor can you build enough nuclear power plants quick enough — for a direct substitution for fossil fuel.’’
Improvements in the efficiency of coal-fired power stations will also help. ‘‘ For every 1 per cent increase in thermal efficiency, we can get a 2 to 3 per cent reduction in emissions, ’’ Hooke says.
Clean coal technologies don’t come cheap and will significantly increase electricity costs — by around 50 per cent for the carbon capture and storage systems currently in development. However, Hooke believes the price of coal will remain competitive regardless. ‘‘ The price increase will only bring it into line with gas — and nuclear, if it ever happens — and renewables. In fact, it’s still probably cheaper.’’
Hooke has no doubt about the long-term viability of the coal industry. ‘‘ Coal is going to continue to be a primary energy source for centuries to come — for your grandchildren and well beyond.
‘‘ It’s cheap, it’s abundant, it’s available to developing countries — and those countries are not going to compromise their access to this form of energy for all those other noneconomic objectives.’’ However, he believes clean coal technologies are the way of the future. ‘‘ If we can’t get a suite of clean coal technologies — including carbon capture and storage — we’re cooked,’’ he says. ‘‘ You can’t have a global change solution without a global clean coal strategy.’’
Ian Loftus from the Association of Mining and Exploration Companies, which represents junior and medium-sized miners, says his members are limited in what they can do in the area of climate change.
‘‘ They’re not huge consumers and generators of greenhouse gases,’’ he says. ‘‘ If your biggest expenditure is relatively small volumes of diesel, petrol and electricity, the scope for contributing meaningfully to greenhouse gas emissions is very very limited.’’
Loftus believes a tougher approach on taxing greenhouse-gas-emitting energy sources would produce results. ‘‘ Everybody has a role to play in addressing climate change, but I think for a lot of our members the real drivers are the costs involved,’’ he says. ‘‘ If greenhouse emitting sources of power were taxed — if a component of that cost reflected the true environmental cost, then that would force more people, including miners, onto sources of energy that are cleaner.’’
The Australian Conservation Foundation’s Tony Mohr supports the idea of more federal legislative reforms forcing the mining industry to take further action on climate change. As well as heavier taxes on fossil fuel power generation, Mohr is calling for the scrapping of the diesel fuel rebate for miners.
‘‘ At the moment we are experiencing boom times and yet the mining industry receives a very heavy tax subsidy in the form of a diesel fuel rebate,’’ he says. ’‘‘ It would be a much higher incentive for mining companies to reduce their fuel consumption without it. Outside of the coal process, fuel emissions are probably the biggest source of greenhouse gases.’’
Hooke is not worried by the environmental lobby and is optimistic about the mining industry’s future despite the challenges of climate change.
‘‘ I don’t see any job losses on the horizon and I don’t see a contraction in the mining industry’s business on account of our response to climate change,’’ he says.
‘‘ If anything, there’ll be an expansion because there’ll be a whole stack of new technologies to be rolled out.
‘‘ I see this as part of the challenge of developing a highly sophisticated, technologically innovative industry, and one that understands its environmental and social responsibilities.’’
Reality: Mitch Hooke says any mining company not addressing the concept of climate change is off-track