November 4, 2019 / 12:15 AM / 14 days ago

Australia's threat to outlaw mining protests highlights industry split: Russell

LAUNCESTON, Australia (Reuters) - The boss of a major mining company last week made a plea to the industry to do more to win the hearts and minds of the broader public. A few days later the leader of the country hosting the bulk of his operations threatened to outlaw those opposed to mining.

What makes the situation more bizarre is that the threat against the right to protest was made by Scott Morrison, the prime minister of Australia, a country with a long democratic tradition and a history of political tolerance.

Morrison, the leader of the conservative Liberal Party, told a meeting of a mining lobby group on Nov. 2 that there is a “new breed of radical activism” that didn’t permit the expression of alternative viewpoints.

But seemingly unaware of the hypocrisy he was about to expound, Morrison said his government is looking at measures that would make it illegal to advocate so-called secondary boycotts of companies that do business with miners targeted by climate activists.

“Let me assure you this is not something my government intends to allow to go unchecked,” The Guardian newspaper reported Morrison as saying.

“Together with the attorney general, we are working to identify mechanisms that can successfully outlaw these indulgent and selfish practices that threaten the livelihoods of fellow Australians,” Morrison said.

Morrison’s comments unleashed a predictable storm of opposition from political rivals and legal experts, but the real damage is once again being inflicted on the mining industry.

The industry is increasingly split along climate change lines.

There are those who are determined to try and win public support for their operations by committing to reducing their carbon footprint and constantly highlighting that minerals are essential to the transition to a low-carbon economy.

And then there are those miners, predominantly coal producers, that are largely climate change denialists, and they are increasingly focused on debunking science while seeking the protection of conservative governments, such as those led by Morrison and U.S. President Donald Trump.

RIO TINTO’S PLEA

Rio Tinto Chief Executive Jean-Sebastien Jacques used the keynote speech at last week’s London Metal Exchange annual forum to make the case that global miners need to do more to address climate change and community concerns over their operations.

Rio Tinto’s largest division, iron ore, is anchored in Australia and the company is the nation’s biggest exporter of the steel-making ingredient.

Jacques told the Oct. 28 forum that mining needed to do more on the environmental, social and corporate governance (ESG) front in order to remain relevant and profitable as the world deals with climate change.

“Lots of people are talking about it, but I’m not sure there is action,” Jacques said.

The action proposed by Morrison probably isn’t what Jacques had in mind, and the different views expressed by the two leaders underscores the size of the gulf emerging over the outlook for the resources sector.

One of Morrison’s consistent themes since he became prime minister in August last year is that the voices of what he terms the “quiet Australians” are being ignored and drowned out by a minority of vociferous activists.

He may be correct that supporters of mining in regional communities aren’t often in the public eye, but he’s probably increasingly wrong about the views of what he also termed “quiet shareholders.”

Speak to mining executives and a consistent picture emerges that large institutional shareholders, as well as bankers, are becoming increasingly concerned about climate change issues, and are demanding action from resource companies if they are going to be involved in future projects.

The touchstone in Australia for much of the climate activism, and Morrison’s response, is the planned Carmichael coal mine in Queensland state, being developed by Indian conglomerate Adani.

The mine would open up a new, remote coal basin and while it has been scaled back in size to an initial 8 million tonnes per annum capacity, it’s still the largest new coal mine being developed globally to supply the seaborne market.

Morrison’s government has thrown its weight behind the mine, even though public opposition, mainly in the cities, has been mounting and an increasing list of companies have said they won’t be associated with the new mine.

Threatening legal action against those who protest against the Adani mine and its commercial backers and suppliers is probably the opposite message of what progressive miners such as Rio’s Jacques want to promote.

At Morrison’s speech, the largely white, male and middle-aged mining audience booed a female journalist who asked the prime minister about climate change and whether it was wise to open a new coal mine. It wasn’t a good look for the industry.

However, at the LME forum in London, Jacques was warmly applauded and asked sensible, thoughtful questions from the floor, showing that there are many in the industry who take the social licence issues seriously.

The time for miners committed to a low-carbon future and those who aren’t to split from each other by setting up distinct lobbying groups seems to be drawing closer.

Editing by Richard Pullin

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