Anglo American chief executive Mark Cutifani believes metallurgical coal is necessary to decarbonise the planet, but does expect the commodity will eventually be removed from supply chains.
Speaking at the Bank of America Securities Global Metals, Mining and Steel Conference this week, Cutifani said his company had access to high-quality metallurgical coal.
“The world needs met coal to produce steel and the world needs steel to decarbonise our economy,” Cutifani said.
“Anybody who talks about getting rid of met coal in the next 10 to 15 years is really on another planet. We need met coal to decarbonise the planet and over the next 15 to 20 years it will progressively be taken out of the supply chain.
“So our resources will last until 2035-2040. We won’t go building or growing the business beyond that period. We’ve got so many other options that we have because of the products we produce.
“We don’t have a new mine on the drawing board, we have got some areas that we will continue to invest in to sustain the business. But I don’t think we are going to be a significant producer beyond 2035-2040 to be frank.”
Anglo American is the world’s third largest seaborne exporter of metallurgical coal. It has two open cut and three underground metallurgical coal mines in Queensland’s Bowen Basin, along with additional joint venture interests and growth projects.
The company delivered nearly 4.2 million tonnes in the December quarter, down from 6.3 million tonnes during the previous period in 2019.
It expects its output to rise in 2021, targeting a production of around 24 million tonnes this year.
The company’s Australian thermal coal prices last year were 17 per cent lower than 2019, with $US58 ($75.5) per tonne achieved throughout the 2020 financial year.
Cutifani said there were opportunities for the mining industry to supply its products safely, responsibly and reliably.
“We see material opportunity for Anglo American to continue to set itself apart in terms of the performance of our diversified business, further enhanced through sector-leading 25 per cent volume growth over the next four years, led by copper and the platinum group metals,” he said.
“Most importantly, as the supplier of such critical materials, it is the duty of our industry to ensure that in everything we do, we act responsibly and deliver enduring value for our full breadth of stakeholders, including our planet.
“By integrating technology with a sustainability mindset and our clear ESG commitments – including carbon neutral operations by 2040 – we are fundamentally changing the nature of mining to position ourselves for a sustainable future.”