BHP and Fortescue at war over diesel and technology as Four Corners exposes Big Australian’s green energy backflip

There appears to be no love lost between two of the country’s most powerful mining groups – BHP and Andrew Forrest’s Fortescue. It may have ever been thus, but there are now billions of dollars and reputations at stake over their divergent views on the green energy transition.

Forrest’s view is well established. The world needs to cut emissions now and he insists the technology is there to do so, and so has set the remarkably ambitious goal of eliminating all fossil fuels from his giant iron ore mining operations in the Pilbara within four years – to save money and to prove a point.

What is less known is the spectacular backflip by the world’s biggest mining company BHP, which a few years ago came out all warm and cuddly around renewables and electrification, but which has now abandoned those plans and turned to media advertising and government pressure to protect its reputation and its cash flows.

The full extent of BHP’s backflip was highlighted in an ABC Four Corners program – and Guardian reports – on Monday night, courtesy of a bundle of internal documents that revealed the decisions to dump planned wind, solar and battery projects, and put off the electrification of its mining fleet by a decade or more.

BHP argues that the technology is not there. Fortescue insists it already is, but there is more than that at stake.

BHP last financial year pocketed more than $620 million from diesel fuel rebates alone. Fortescue says the diesel rebates to mining companies could total more than $80 billion by 2030, and wants them capped at $50 million a year, arguing that they are a barrier to the energy transition.

See: “Despots, oligarchs, fruitcakes and invaders:” Why Andrew Forrest wants to stop burning fossil fuels

As economist Ross Garnault told the program, the removal of the rebates would certainly encourage more investment in green energy, and electric trucks.

BHP, however, is throwing its weight around – both in the media with a major advertising campaign in the week before the Four Corners report, and in the corridors of power where it has reportedly threatened an even bigger campaign against the government if it agreed to slash the rebate.

Last week, research firm Mandala Partners published a brief analysis of the top 20 industrial companies in the ASX to highlight their progress on emissions over the last give financial years.

BHP came second (after tollroad company Transurban) with a fall of 36 per cent, and Fortescue fared less well with a 24 per cent rise.

Just a day after the Mandala Partners report was published, BHP started an intensive media campaign involving half page ads in major newspapers such as the AFR, the SMH and the Australian for example, and the mining lobby it leads published op-eds saying the technology is not going anywhere anytime soon.

Friendly media – and social media – also took the opportunity to take pot shots at what they said was the failure of Fortescue to deliver on its promises.

A series of announcements by Fortescue, including the start of construction of the biggest solar farm outside Australia’s main grid, and a massive eight-hour battery, barely got a mention in the mainstream media.

But, as Tim Buckley from Climate and Energy Finance explains, it is not what it seems. The Mandala report, for instance, fails to explain that Fortescue’s emissions are the result of the opening of a massive new mine and vastly increased production. It still has a target of cutting its emissions at these mines by 100 per cent in four years.

The BHP calculation, however, includes the impacts of M&A activity, and the massive decarbonisation of its Chile mine in 2022 by renewable energy.

Why is it BHP can do it way way back in 2022 in Chile but not in the decade to 2030 in the Pilbara?!” Buckley wrote on LinkedIn. “Hint – $620m pa is why!”

He says BHP‘s Climate Transition Action Plan (CTAP) show company wide operational emissions are projected to rise from FY2025 to FY2030. “BHP clearly tracks organic growth (dark blue), unlike Mandala‘s pamphlet, and show a like-for-like corporate structure excluding M&A.”

Its emissions in the Pilbara have gone up by 6 per cent over last five years, and it has weak targets for the future, still declaring – loudly – that the technologies that Fortescue is deploying do not exist.

Fortescue CEO Dino Otranto said the company commended Four Corners for asking “hard questions” about whether parts of the mining industry are genuinely following through on their decarbonisation commitments.

“Fortescue chose to move early, invest heavily and prove industrial decarbonisation can actually be done,” Otranto said in an emailed statement.

“With more than 1.4GW of solar, over 1GWh of battery storage and 133MW of wind either operational or under construction, 16 electric excavators and an electric drill already operating in the Pilbara, and our first battery electric haul truck arriving this year, we are proving the technology exists today.

“The real issue is no longer technology readiness. The real issue is whether companies are prepared to stop delaying and start deploying.

“It’s unacceptable that leaders of industry associations do not consult the industries they are supposed to represent in making policy statements to public.”

It’s also ironic, because yet another iron ore gazillionaire, Gina Rinehart, also takes a hard line against net zero and green technologies, probably more for ideological reasons than for business reasons.

After all, as we have highlighted, some of her mining interests are achieving spectacular results with their renewable and battery power set ups, averaging more than 95 per cent renewables over one month at one mine and more than an 80 per cent over another.

Not only is the technology there, but the economics are also overwhelming. Little wonder that Rinehart is so keen to boost her investment in another company, Arafura, that has received more than $1.2 billion in government funds to mine minerals essential for more wind turbines to be built and more EVs to hit the road.

The difference here is that Rinehart is talking the green energy industry down while investing heavily in the minerals that guarantee its future, while BHP is talking up its own image as a good corporate citizen, but is happy to cash in on policies that encourage the opposite behaviour.

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