Rio Tinto, the world’s second biggest miner is actually going coal free – yes, they are no longer going to dig for any coal. The company had begun this activity of moving away from coal for some time now and has been looking at better assets, which do not cause so much harm to the environment. Finally, it has been able to do so.
This requires immense strength – to be able to say NO to an asset which is a gold mine. It is very very rare that companies will ever say NO to anything which makes them money; environment is all good copy and media photo-opp.
But here is the twist; the company did not stop due to the environment or pressure from climate change activists; coal mines are simply not able to compete with other assets as the cost incurred and productive results do not make business sense.
Irrespective of the reasons, companies are today indeed forced to think about climate change scenarios in the macro-economic and cyclical scenarios that they work with; the big miners will have to eventually work out which commodities are going to be most disadvantaged in the future.
Are Indian companies even thinking in these terms?