Japanese trading house Mitsui & Co plans to trim its thermal coal investments amid growing pressure worldwide for companies to cut reliance on the fossil fuel after last year’s landmark climate pact in Paris, its president said on Wednesday.
Mitsui owns mine stakes that had an equivalent annual output of about 13.5 million tons in the year ended March 31, and it expects that figure to drop to 9 million tons in three years.
“Considering the result of the global climate summit, we basically plan to reduce thermal coal assets,” Mitsui President and Chief Executive Officer (CEO) Tatsuo Yasunaga told an analyst meeting on Wednesday.
Global leaders clinched a climate-protection deal in Paris in December to transform the world’s fossil-fuel driven economy, and calls have grown since for the global power sector and other industries to reduce coal use.
Under the pact, Japan, the world’s No. 5 emitter of carbon dioxide, has agreed to cut greenhouse emissions by 26% from 2013 levels by 2030, but it has come under pressure for not doing more to reduce its dependence on coal.
“We will consider reducing thermal coal output or selling stakes in thermal coal mines,” Yasunaga said, although adding that Mitsui will continue to invest in coking coal assets.
The Tokyo-based company agreed in 2014 to buy stakes in Vale’s Moatize coking coal mine and port project in Mozambique for $763 million, and is now planning to close the deal by March 2017, according to Yasunaga.
“We are working on a finance deal with Vale and we expect to close the deal soon,” he said.
As for a final investment decision (FID) on a liquefied natural gas (LNG) project off the coast of Mozambique, Yasunaga said negotiations with the local government are in final stages. He did not project an exact timing of FID, but said he expects “an advancement” in the process by next March.
Thanks to falling construction and development costs, the Mozambique LNG project is becoming competitive even with the current low oil prices, he said.
Mitsui on Tuesday posted its first annual loss since being established in 1947, booking massive writedowns for the year ended March 31 after iron ore, copper and oil prices plunged.
The company plans to step up selling assets, include some metal holdings, Yasunaga said without further elaboration.
Mitsui plans to continue to invest in other resource assets, however, with a focus on areas where it has some strength such as in iron ore and natural gas, Yasunaga said.
Source: Japan Today