Norway Wealth Fund Set For $4.2 Billion in New Coal Divestments
Norway Wealth Fund Set For $4.2 Billion in New Coal Divestments
(Bloomberg) -- Tighter restrictions on the Norwegian sovereign wealth fund’s coal investments mean it could have to sell more than $4 billion of stocks in major miners and utilities.
Norway’s government proposed on Friday to expand the fund’s ban on thermal coal by introducing an absolute limit on how much of the fuel companies can produce or burn for power. The new rules, which set a cap of 20 million tons in output or 10,000 megawatts in power capacity, are meant to close what activists and opposition politicians have called a loophole in the current restrictions.
Based on company reports and a database established by environmental group Urgewald, these are the companies that the fund would have to exclude under the new rules:
| Company | Value of fund’s holding (end 2018) | Fund stake |
|---|---|---|
| Glencore | $1.06b | 2.03% |
| BHP Group (U.K.) | $1.15b | 2.59% |
| BHP Group (Australia) | $546m | 0.77% |
| Anglo American | $621m | 2.16% |
| Sumitomo | $245m | 1.38% |
| South32 | $266m | 2.22% |
| RWE | $186m | 1.39% |
| Uniper | $97m | 1.03% |
| TOTAL | $4.17b |
Norway’s Finance Ministry said in its annual white paper that the fund is invested in six miners and two utilities that would fall under the new restrictions, without naming them. That is consistent with the seven companies identified by Bloomberg, given RWE AG falls into both categories.
To be sure, the ministry said the fund should be allowed to retain investments in companies that exceed the thresholds if they have plans for reductions that would make them compliant in the future. That already applies to the current restrictions, which ban companies that base more than 30 percent of their revenues or activity on thermal coal.
Norges Bank Investment Management, the central bank unit that manages the fund, declined to comment on the size of the potential divestments. They would come on top of the exclusion of 69 companies based on the current rules.
--With assistance from Thomas Biesheuvel, William Wilkes and Jeremy Hodges.
To contact the reporter on this story: Mikael Holter in Oslo at mholter2@bloomberg.net
To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Stephen Treloar, Jonas Bergman
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