Whitehaven Coal, one of Australia’s biggest coal producers, faces a rare “second strike” from shareholders this week as climate activists seek to draw attention to the miner’s plans to ramp up volumes and resulting carbon emissions.
The ASX-listed company received a 41% vote against its executives’ remuneration report at last year’s annual general meeting. A vote of at least 25% at this year’s AGM on Wednesday would force a motion to spill Whitehaven’s board.
Market Forces, a climate action lobby, said the investor group Glass Lewis backed a second censure against Whitehaven. Another investor, ISS, also called for a rejection of plans to award the chief executive, Paul Flynn, a 1m share bonus worth about $7m.
“Whitehaven is paying massive bonuses to executives for steamrolling ahead with an outdated and unacceptably risky coal growth strategy,” said Will van de Pol, Market Forces’ chief executive. “Investors do have the power to change companies if they are willing to pull out all the stops and use that power.”
Whitehaven plans to expand its thermal coal output alone by about 40% in the next 20 years at a time when fossil fuel production should be in retreat, a shift out of step even with its peers in Australia, according to Van de Pol. Some of its plans, including the Blackwater South mine in Queensland, had a planned life of as much as 90 years.
While not all of the projects have reached final investment decisions, “all are on the table”, he said. “We have to assume they plan to develop them.”
Successful “second strike” votes are fairly rare, with none achieved in last year’s AGM season, according to consultancy PwC.
Still, Whitehaven may face an embarrassing event at Wednesday’s gathering in Sydney. A protest vote of more than 25% would result in a spill motion for the board.
Should that motion secure at least 50% of shareholders’ votes, Whitehaven would be forced to call a subsequent meeting to choose its non-executive board members.
For its part, Whitehaven issued a statement aimed at rebuking Market Forces’ push.
“Whitehaven’s remuneration framework considers short-term production goals (with outcomes based on performance versus yearly budgets) and long-term project advancement, both to replace mines which are closing (due to finite mine lives) and to develop new projects with attractive rates of return,” the company said in defence of its salary plan.
As to its emissions plan, “Net Zero emissions does not mean no emissions,” it said. “Offsetting remains a viable method to reduce anthropogenic carbon emissions and indeed was provisioned for under Article 6 of the Paris Agreement.
“We believe the transition to a low-carbon economy will take decades, not years, and that decarbonisation must be considered alongside the need to support economic activity and growth while providing secure and reliable energy to underpin standards of living,” it said.
Whitehaven said claims it wanted to expand production by 80% or that it had a $6bn development pipeline were “a vast overstatement”.
Its four “strategic development projects” were the Vickery extension project, Narrabri Stage 3, Winchester South and the Maules Creek continuation project”.
Market Forces said Whitehaven’s expansion plans would result in 23 times the cumulative emissions reductions expected to be made from the Albanese government’s safeguard mechanism to curb carbon emissions from industry by 2030.
The company’s trajectory was also at odds with the three main scenarios put forward by the International Energy Agency, it said.
“If all mines are pursued, Market Forces estimates the company’s product coal output would peak at just shy of 60m tonnes in the mid-2030s,” it said.
