The Washington Post

BHP’s Andrew Mackenzie brings leftist past to bear in defense of global coal industry

Correction: An earlier version of this article incorrectly reported that Stanford University has a nearly $19 million endowment fund. The university's endowment fund is almost $19 billion.

Andrew Mackenzie, chief executive officer of BHP Billiton Ltd., says climate-change solutions must not impose hardship in developing countries. (Jeremy Piper/Bloomberg)

Andrew Mackenzie isn’t your regular mining company chief executive. He speaks five languages, including Norwegian. He recently was elected to Britain’s Royal Society, an honor reserved for scientific luminaries such as Stephen Hawking. He is reading Thomas Piketty’s assault on economic orthodoxy, “Capital in the Twenty-First Century.” He catches a train to work and drives a hybrid on weekends.

With a long-standing interest in the role of business in global economic development, the head of the world’s biggest mining company, BHP Billiton, is essentially a left-wing intellectual, according to a former think-tank colleague.

Now, the Scottish-raised Mackenzie, who lives in Melbourne, Australia, has emerged as a defender of the global coal industry against an energetic, well-organized campaign stretching from the Australian outback to the corridors of the U.S. Capitol.

As a dedicated scientist with a strong social conscience, Mackenzie would be aware of the conflict between his leadership of a large coal producer and his personal belief that humans are contributing to a warmer climate, said Madeleine Bunting, a journalist who worked with him in the mid-2000s at Demos, a London think tank associated with then-Prime Minister Tony Blair’s Labor government.

“The position he has put himself in is an extraordinary one,” she said in an interview. “He is on the horns of a dilemma.”

Along with many other big multinational companies, BHP has been identified by environmental activists as a major contributor to climate change. Generating $66 billion in annual sales, it is the world’s largest exporter of coking coal, which is used to make steel, and the largest foreign shale-gas driller in the United States, where it operates in Arizona, Arkansas, Louisiana, New Mexico and Texas.

The company is a target of a fossil fuel “divestment” campaign that seeks to persuade cities, universities, foundations, churches and other institutional investors to boycott coal, natural gas and oil producers.

And the movement — led by Bill McKibben, founder of the pressure group — is gaining traction. Stanford University announced in May that it would no longer invest any of its nearly $19 billion endowment fund in companies that mine coal. A month later, it was joined by the University of Dayton in Ohio, the first Catholic university to divest coal and other fossil fuels from its holdings. The British Medical Association, which represents doctors such as Mackenzie’s father, a general physician, recently voted to participate in the boycott.

In speeches and interviews, Mackenzie suggests that the benefits of coal are not appreciated, noting that it is still the main source of heat for hundreds of millions of people who chop down trees or gather dead branches for charcoal.

“Eighty percent of the world’s energy is generated from fossil fuels, and Asia is dependent on coal,” he said at a recent news briefing in Sydney. As for climate change, he said, “we have to do something in a way that doesn’t condemn large numbers of people in the developed world to live in poverty.”

His position reflects a central tension in climate change diplomacy: People in rich nations want poor countries to reduce their dependence on energy sources, such as coal, that helped make the developed world wealthy in the first place.

Mackenzie was raised in a village near Glasgow, where his father ran a medical practice in a depressed area of the gritty city, and he later graduated with top honors from the University of St. Andrews.

He joined BP, the British oil giant, as a geologist and conducted groundbreaking research on the structure of oil that led to several awards and the Royal Society nod. In 2001, he co-wrote an article on business ethics that implied that companies might have to act on the problem of climate change because governments lacked the political will. In 2004, he was made head of industrial minerals at the Anglo-Australian mining giant Rio Tinto.

While rising through the corporate ranks, Mackenzie became active in British politics, including being elected chairman of Demos.

The two worlds stood in sharp contrast. Mackenzie would wear black polo shirts, the unofficial uniform of leftist British intellectuals, to meetings at Demos’s spartan offices, said Bunting, a Guardian columnist whom Mackenzie appointed director of the think tank. His wife, Liz, was a left-wing assembly member of the London borough of Richmond.

But when Bunting visited Mackenzie at Rio Tinto headquarters in London’s posh St. James’s Square, she sank into the plush carpet. The executives’ elegant offices were cool and quiet in the summer heat.

“You suddenly realized how insulated they were,” Bunting said.

Mackenzie, who moved to BHP from Rio Tinto in 2007, declined to be interviewed or respond to written questions.

Despite the growth of wind farms, solar panels and other sources of renewable energy, Mackenzie has predicted in speeches that by 2030, more than 70 percent of the world’s energy will still come from oil, natural gas and coal.

“The growth of our industry is fundamentally tied to the alleviation of abject poverty and the successful development of emerging economies,” he said at an energy conference in Houston in March.

Critics say Mackenzie’s advocacy of coal ignores the catastrophic impact of rising sea levels and hotter weather. “I think you should point out how self-serving and fallacious those comments are,” McKibben said in an interview.

Activists plan a march in New York City on Sept. 21 that they hope will be the largest mass protest about climate change ever — a show of force meant to put pressure on world leaders meeting two days later at the U.N. headquarters to discuss global warming.

The U.N. meeting is intended to build momentum for an agreement on global carbon emissions that will be negotiated in Paris next year under the U.N. Framework Convention on Climate Change.

Many industries contribute to global warming, scientists say. Climate activists, though, reserve a special contempt for mining companies such as BHP because coal is the primary cause of the phenomenon, they say.

The coal industry in Australia, which has the world’s fourth-largest coal reserves, has helped make the country the 10th-largest emitter of greenhouse gases on a per-person basis, according to a ranking by the Global Carbon Project, which helps coordinate climate research. Australia’s conservative coalition government recently abolished a tax on carbon emissions designed to combat global warming.

In April, the Minerals Council of Australia, a lobby group partly funded by BHP, began a campaign to shore up support for the industry. It encouraged people to e-mail lawmakers, urging them to defend an industry “under attack from activists and extremists” and to tweet positive messages. One conservative politician appeared in Parliament wearing a miners’-type fluorescent shirt printed with the campaign’s slogan, “Australians for coal.”

The campaign appeared to have little impact. A spokesman for the Greens lawmaker representing central Melbourne, where Mackenzie’s offices are located, said he received 30 to 40 e-mails in favor of coal mining — and more against it.

Activists hijacked the campaign’s Twitter hashtag and posted sarcastic comments. “I support #australiansforcoal because I’ve never witnessed a mass extinction event and it sounds kind of cool,” one said.



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