Top Mining Companies Risk $10 Billion in Earnings from Carbon Price

The world’s largest mining companies face a collective $10 billion risk if global carbon pricing tightens following the COP21 Paris climate talks, which begin next week, according to report from CDP.

The 11 ranked companies in the report account for around 85 percent of mining emissions. A $10 billion risk across the 11 companies if a carbon price of $50 per metric ton is introduced represents about 15 percent of their collective earnings, CDP says.

In the report, CDP analyzed a group of the largest metal and mining companies, with combined market capitalization of $329 billion, and found they are failing to adequately manage carbon and water risks, with most unsupportive of new climate regulation.

The report uses environmental data from CDP and assesses whether the companies are taking action such as setting meaningful emissions reduction targets, conducting water stress evaluation or preparing for the expected tightening and expansion of carbon regulation set to emerge from COP21 in Paris.

The findings include:

• No company achieved the top tier of grade (A or B) for all five criteria. All except two had a D grade or below in at least one area;
• Only six of the 11 miners disclose meaningful GHG emission reduction targets;
• Glencore and First Quantum Minerals were the worst “across the board” performers;
• Most (9 out of 11) large miners oppose new climate regulation. Only two appear to be “supportive of climate regulation;”
• Almost 50 percent of company facilities are located in areas with medium or high water stress;
• Glencore is the clear laggard on carbon regulation readiness, due to its opposition to carbon pricing and dismissal of the concept of stranded assets;
• More than half the companies are involved in coal production, and together they represent 40 percent of the global seaborne (export) market in coking coal and 27 percent in thermal coal.