BHP chairman Ken MacKenzie said the company would consider shutting down its Mount Arthur thermal coal mine in New South Wales, Australia, if no suitable alternative could be found to ending its involvement with the site. The firm plans to stop thermal coal mining as a part of its emissions reduction targets but the hurdles it is encountering on its Net-Zero journey are an example of what other natural resource companies will face down the line.

Investors have been pressuring BHP, the world’s largest miner, to consider a number of routes. Some want the company to divest immediately through a sale of the asset, while others want a more gradual exit, which would ensure the site is maintained responsibly through the end of its life.

At stake are company targets to exit thermal coal production by next year, potential environmental impact of new owners running the mine in a more aggressive manner, and the cost of the long-term rehabilitation of the area. So far, BHP has not received any bids for the Mount Arthur mine.

Other natural resource companies are looking at this case as an example of how the industry as a whole can end production of carbon-intensive materials. “The best thing that BHP could do is set a global precedent about how to exit responsibly,” said Tim Buckley, director of Austrian think tank Institute for Energy Economics and Financial Analysis (IEEFA). As part of any spin off, IEEFA has proposed BHP set up an A$1 billion sinking fund to cover future rehabilitation liabilities.