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Mining & Industry

29 June, 2021

Association by coal – METS businesses collateral damage in deluded climate change activism efforts

TO DENY METS businesses access to insurance and lending based on their supply connections to coal does nothing to mitigate climate change. That was the strong message delivered by Resource Industry Network at Friday’s public hearing of the Inquiry into the prudential regulation of investment in Australia’s export industries.

Providing evidence at the hearing on behalf of the RIN network, chair David Hartigan and general manager Dean Kirkwood acknowledged the good intentions of climate change activists but made some compelling points about their ill-considered efforts to shut down the coal industry and its supply chain.

“METS businesses work across a diverse range of sectors including renewables. They are the key to the development of technology critical in reducing emissions,” Mr Kirkwood said.

“They also are actively pursuing, creating and deploying solutions across the entire resources value chain to provide the building blocks of low-emission technologies and are well entrenched in the decarbonising journey.”

Mr Hartigan added to the hearing by offering his business’ experience on the issue by saying that Field Engineers Professional Indemnity insurance had changed dramatically in the past six years. “

The annual increase compounding every year has been 61%.

If you contrast this to the CPI, it’s 1.5 percent for the rest of the economy,” Mr Hartigan said.

“It’s 18 times higher now than it was six years ago, and we now spend more on this intangible risk management tool than we do on IT or diesel for our fleet of vehicles. Our insurance is now our biggest single cost other than wages.

“What’s troubling us even more is the fact that an arbitrary cap has been placed on a proportion of the business’ income that can be derived from working with thermal coal companies.

“A cap like this hits small regional businesses because their book is more likely to be comprised largely of mining operations in which they are located in close proximity. It does not affect big businesses, transnational, or multinationals because their order book is much bigger, and they have more options when it comes to accessing international finance.

“It ultimately means our resources sector will be made up of fewer local businesses and more global ones with no improvement to the planet because the demand will still be there, it just won’t be met by locally-owned businesses.”

Mr Hartigan added that there were misconceptions about the issue, which needed to be addressed, with the first being that local business were ill-informed climate deniers.

“That’s not the case at all. At university, engineers study the science of chemistry, energy conversion, and heat transfer. I don’t’ know any engineers that are science deniers or climate deniers. What we study at university makes up the very mechanism of anthropogenic climate change, and we understand it better than most of the population.

“We also understand Australia’s place in the energy market and how easily our energy exports are simply replaced with other likelier dirtier ones. However well-intentioned people are, if they don’t understand how this mechanism works, they’re prone to be misguided,” he said.

“The second misconception was that the ‘smart money’ was leading the coal sector right now so everything should just be left to the market.

“In my observation that’s not the case. If that were so, we would see demand for Australian coal falling, but it is not. Our biggest trading partners are still building new coal-fired steel mills, cement kilns, and power plants.

“If we allow regional SMEs to be the collateral damage of well-meaning but misguided global activism, the planet won’t be better off. Australia will just be poorer, less capable of adapting to a lower carbon future, and less capable of responding to the effects of climate change because we won’t have the STEM capability that businesses, like ours, and many other businesses, are developing and expanding,” Mr Hartigan said.

In preparing RIN’s submission, METS businesses were invited to comment on how their businesses have been impacted and their thoughts on the reasoning behind the decisions.

Mr Kirkwood said one business owner summed up the issue well by saying: “The delegation of authority has shifted to much more senior personnel in the organisation, which removes relationships, makes them more risk adverse and slows approvals down.”

Mr Kirkwood added that the breakdown of this relationship means that the lender is not aware of all the industries that the business services and what products and solutions they provide.

Another METS business owner said: “Please stop discriminating against our business. We have been in business for over 25 years in a legitimate occupation and we are treated differently to every other business I know. It’s un-Australian.”

Resource Industry Network joined other resources industry stakeholders in addressing concerns at the public hearing including Queensland Resources Council, Minerals Council of Australia, and mining houses Whitehaven Coal and Adani Australia.

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