MAC: Mines and Communities

London Calling - August 7 2002

Published by MAC on 2002-08-07

London Calling - August 7 2002

The China syndrome

BHPBilliton targets Asia and Europe, ignores Kyoto, abandons India threatens further land theft and pollution iu Colombia, Indonesia and elsewhere. A nice prospect!

Leading global steaming coal miner, BHPBilliton (dual-listed on stock exchanges in London and Sydney) is to shell out a cool billion dollars expanding its "energy coal division" , targeting Asia as the chief "mopper up" of the excess. The new output won't come from South Africa however - where the company reckons it's just about reached the production ceiling - but primarily from Colombia. Here, the highly controversial and damaging Cerrejon mines (co-owned with London-based Anglo American and the Swiss rogue trading company Glencore) have a 22m tonnes a year capacity (That's just under a quarter of BHPBilliton's total annual production). The the Cerrejon operations trespass on Wayuu Indigenous and territory and Afro-Caribbean settlements.

BHPBilliton now plans on doubling Colombia's output to around 40m tonnes a year, though at a measured pace. This additional tonnage would not - for cost reasons - be exported to Asia, but meet demand from the European steam coal market. A recent European Union green paper on coal mining recommended diverting investment away from internal expansion and boosting imports. With Europe signing new contracts, if only on a modest scale, BHPBIlliton would re-direct some of its massive South African production (which totals 55 million tonnes a year) to Asia, complementing existing output from Indonesia.

By "Asia" the company definitely doesn't mean India: earlier this year it stopped supplying a country whose markets it dismisses as "low value added and erratic". (In 2000, BHP withdrew from base metals exploration in India no doubt for similar reasons).Instead, it's aiming at Japan and South Korea.

China's killing fields

BHPBilliton predicts that China's own exports to Asian markets (currently just over 70m tonnes annually) will peak at 100 million tonnes a year by 2007, leaving the door open for aggressive competition from outside the region. It's a view which isn't shared by everyone. The Netherlands investment bank ABN Amro believes China's current five year plan is boosting regional sales well beyond this point - whatever the cost in sacrificed lives. China already accounts for an astonishing 80% of global sea-bourne coal trade - mostly to north Asia. It can dig up the black stuff more cheaply than anyone else, and its selling price is now severely undercutting Australia's.

This advantage is due primarily to the ruthless exploitation of Chinese workers, both by the country's estimated 23,000 (sic) "illegal" mines and its state-administered ones. Together these coal pits represent the mining industry's biggest "killing fields" anywhere in world. The victims are predominantly from China's impoverished rural areas - especially in the South - amounting to a procession of migrant mine labour which outstrips that anywhere else in the world, including Southern Africa.

Since 1997 officially between 5,000 and 6,000 miners have died each year, while the central authorities put fatalities from all types of mines at around 10,000. In the first six months of 2002 alone, as coal output further increased so did the official death rate - to almost four thousand (3,393).

Is the life of one American worth that of 25 Chinese? The world's media seems to think so. Last month (July 2002 ) nine coal miners were thankfully rescued from the Que Creek underground mine in Pennsylvania. The world's media headlined both their plight and their rescue, giving thousands of column inches and hours of broadcasting time to the event. Since early June this year, at least 240 Chinese miners have been killed in just three coal and one gold mine. The biggest disaster was at the Chengzihe mine in Heilongjiang, where a coal gas blast claimed the lives of 111 miners and four rescue workers. These terrible events merited no more than a few paragraphs in a few global newspapers - including the mining press.

Kyoto - Who cares?

BHPBilliton's new marketing tack threatens dramatic increases in adverse global climate changes, lower ambient air quality, more land degradation and (in Colombia especially) further arbitrary and brutal land seizures. But BHPBIlliton barely conceals its contempt for the Kyoto Treaty and its utter lack of respect for Indigenous Peoples rights.

In a recent lengthy private video strategy conference between all the company's coal sector leaders, the subject of climate change came up only twice. First it was recognised as a "problem" but the problem was promptly dismissed, when it was pointed out that Japan is the only Asian nation to have signed on to Kyoto. Land rights and pollution issues didn't get a mention.

So here we have it. Projected modest increases in coal demand from Europe, huge increases from northern Asia, with BHPBilliton and China competing to supply growing demand, all in defiance of the most important environmental protection treaty on the table today. You put your money on BHP and get a better standard of employment and rehabilitation, but at the expense of Colombian and Indonesian Indigenous communities and a hotter planet. You invest in China, bringing electrification to some rural areas, but only by underpinning an industrial holocaust.

As someone who's grown up living in Britain's own "black country" might say: "it's a Hobson's choice".

Meaning no damn choice at all.

[Sources: Ken Gooding "BHPBilliton overstating coal potential?" The MIningweb 24/7/02; BHP Biliton Energy Coal Sector private briefing, BHPBilliton, July 2; Financial Times 17/7/02; International Herald Tribune 3/7/02; The Mining Journal (London) 2/8/02. Reports on Cerrejon/Tabaco are posted on the Mines and Communities website - go to Colombia through the site's search engine, or BHPBilliton on the Company page]

"London Calling" is published by Nostromo Research, London. Its views do not necessarily reflect those of any other inidividual, organisation, or the editorial board of this website. Reproduction with acknolwedgment is welcomed.

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