BHP’s Queensland coal mines are predominantly metallurgical coal which is used for steel production rather than for creating electricity, but the projects still have significant electricity needs, and the decision adds to the company’s move away from thermal coal.

BHP said the deal would effectively displace an estimated 1.7 million tonnes of CO2 between 2021 and 2025 – equivalent to the annual emissions of around 400,000 combustion engine cars and is the first of its kind for the company in Australia.

It also claimed it would support the development of new solar and wind farms in Queensland – the Western Downs Green Power Hub due for completion in late 2022, and Karara Wind Farm due for completion in early 2023.

While its metallurgical coal still produces significant CO2 emissions, BHP’s president of Minerals Australia, Edgar Basto said it was an important step forward in BHP’s transition to more sustainable energy use across our portfolio.

“It will diversify our energy supply, help to reduce our energy costs, and reduce BHP’s Australian scope two emissions (indirect emissions from the generation of purchased energy) by 20 per cent from FY2020 levels,” he said.

The Queensland coal mines are a joint venture under the BHP-Mitsubishi Alliance.

For the first two years, power will be contracted from CleanCo’s low emissions portfolio which includes hydro and gas generation assets. From late 2022, the newly operational solar and wind farms are expected to progressively contribute up to half the electricity requirements, with the remainder supported by CleanCo’s low emissions portfolio. Combined with large-scale generation certificates, this will enable BHP to reduce scope two emissions from its Queensland operations by 50 per cent by 2025, based on FY2020 levels.