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What’s happening in coal may be a warning to other mining and oil and gas companies about how quickly assets can drop in value as investors rally behind the Paris climate accord. It also presents a risk for resource companies that invest in projects based on the coming decades , rather than years.
Coal-asset values have collapsed quickly. Rio Tinto Group sold its last coal mines for almost $4 billion just two years ago amid strong interest from big miners and private equity groups. Now rivals BHP and Anglo American Plc risk paying the price of waiting too long .
“We could have exited a few years back, and we probably would have got a better price, but we’ve also made good cash flows from what are good assets,” Anglo American Chief Executive Officer Mark Cutifani said. “How we exit is more important to me, in terms of stakeholders and reputation, than getting an absolute number on the bottom line.”