Banker Mark Carney only offers hot air at Cop26 (Picture: Bank of England on Flickr)
Coal mine owners are making huge profits out of the energy and climate crises, as governments, bankers and financiers refuse to break from fossil fuels.
Share prices for mining companies have soared in the past few months, despite claims that investors and bankers were abandoning the industry.
Instead, the energy industry’s refusal to break from fossil fuels—and even increased demand for fuel—mean mining bosses are thriving.
Shares at one coal company, Thungela Resources, shot up by 300 percent since it broke away from mining giant Anglo American in July.
It is now worth more than £400 million.
Commentators had expected Thungela to fail, claiming that investors worried about climate change and the future of the coal industry wouldn’t invest in mining.
But Thungela Resources chief executive July Ndlovu gloated that he knew energy companies still want to buy coal.
“The conventional wisdom was this thing will get dumped and that no one is going to buy it,” he said. “What people forgot is that market fundamentals for thermal coal were still solid.”
Other companies such as Glencore—the world’s biggest exporter of coal—are set to make huge profits for shareholders this year. They could keep churning out cash for years to come.
Analysts at the JPMorgan bank say Glencore could make a record £6.08 billion in 2022, when its production of coal will surge to 120 million tonnes.
Coal prices have leapt thanks in part to rising energy demand and utility companies switching to coal due to this year’s gas crisis.
But underlying this is the fact that energy companies and governments refuse to break from fossil fuels.
The International Energy Agency estimates there are 140 gigawatts of new coal plants globally under construction. And at their conference last week, leaders of the G20 richest countries stopped short of agreeing to end the use of coal.
So mining companies haven’t been damaged by bankers not investing in new coal production. Instead, they have used it to sell coal at higher prices to energy companies that still want to buy.
It shows that the market won’t provide the solution to catastrophic climate change—despite what politicians and bankers at the Cop26 conference claim.
Former Bank of England governor Mark Carney boasted that his coalition of finance companies, Gfanz, had promised £73 billion towards ending carbon emissions.
Carney formed the coalition to coincide with Cop26. He claimed it meant, “We now have the essential plumbing in place to move climate change from the fringes to the forefront of finance so that every financial decision takes climate change into account.”
But Gfanz still allows its members to keep investing in fossil fuels. Becky Jarvis of the Bank On Our Future campaign said that just 35 percent of assets owned by Gfanz members matched net zero targets.
“It is not green finance, nor is it all dedicated in the slightest to tackling climate change as long as financiers have large interests in fossil fuel expansion,” she said.
The truth is that even when the market claims to break from fossil fuels, other bosses find a way to profit from it. And while there’s still profit to be made, the bankers and investors will keep the money flowing.
The answer is to fight the whole profit system—not wait for it to sort itself out.
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