Giant fund may ditch Aussie investments

Last updated 13:36 04/03/2014

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Some of Australia's biggest resource companies could lose a major investor if Norway goes through with a plan to ban its famous sovereign wealth fund from investing in coal, oil and gas.

Norway's sovereign wealth fund is the world's biggest at A$840 billion ($897 billion) and is a major shareholder in companies such as BHP Billiton, Woodside Petroleum and Whitehaven Coal.

A non-government majority in the Norwegian parliament had been edging towards a vote on banning the fund from investing in coal, and the pressure has forced the government to launch a year-long expert review into whether the fund should cease investing in all forms of fossil fuel.

The fund is already banned from investing in tobacco and weapons, and it sold out of 27 mining companies during 2013.

Aside from Australia's big resources companies, the fund is also a shareholder in Glencore Xstrata and Anglo American, as well as the world's biggest petroleum companies including Shell, ExxonMobil, BP and Chevron.

A spokesman for Whitehaven Coal said the company was watching the situation in Norway.

The Minerals Council of Australia, which represents the nation's big miners, pointed out that Norwegian miners were still opening coalmines.

''There is a stark divide between the overblown rhetoric on coal divestment and what is happening on the ground,'' a spokesman said.

The Norwegian debate is not the first time BHP's involvement in fossil fuels has been questioned in recent months after environmental campaigner Ian Dunlop ran for a position on the BHP board last year.

He failed in that bid, but said on Monday the Norwegian debate was ''a pointer'' to the way the rest of the world would go.

''Financial markets really have to start thinking about the lemming moment when everybody moves and someone is left holding the baby, and I think we are getting close to that now,'' he said.

Pengana Capital fund manager Tim Schroeders said Norway's fossil fuel review could prompt similar introspection in Australia.

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- Sydney Morning Herald

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