BHP Group Ltd (ASX: BHP) shares might soon be in for another green makeover as Australia's largest listed company looks for some legislative 'laxing'.
Reportedly, there is a push from the mega-mining giant for the Queensland state government to amend a 54-year-old piece of legislation. This legislation is known as the Central Queensland Coal Associates Agreement Act 1968. In response, onlookers are suggesting BHP could be hoping to make an exit from coal easier for itself.
But, what could be behind the move?
Getting out while the going is good
Coal prices are at multi-year highs amid a widespread energy shortage and continuing supply chain issues. According to Trading Economics, coal hit a record high in March of US$430 per tonne. Since then, prices have retreated to US$303 per tonne. Obviously, this has been to the benefit of BHP and its shares.
This might prompt investors to wonder why BHP would be trying to escape out of coal when it appears to be the most lucrative.
In the past, BHP CEO Mike Henry has shown a desire to steer the $260 billion company away from commodities caught up in climate worries. One such example is BHP's recent parting from the petroleum business — handing off its petroleum assets to Woodside Petroleum Ltd (ASX: WPL).
Similarly, BHP shares rallied in November last year after the company announced it would receive US$1.35 billion for the divestment of two metallurgical coal mines.
As a result, investors are focusing on a new bill that would reduce the difficulty of BHP palming off mines under its joint venture with Mitsubishi — referred to as the BHP Mitsubishi Alliance (BMA). Currently, the contents of the 1968 Act preside over eight BMA controlled mines.
In the latest half-year, BHP shares reaped the rewards of higher coal prices. Around 18% of the company's revenue was generated by coal sales.
How have BHP shares performed?
BHP has been the better performer among its iron ore mining peers on the ASX since 2022 kicked off. This year to date, BHP shares have grown in value by 22.3%, while Fortescue Metals Group Limited (ASX: FMG) and Rio Tinto Limited (ASX: RIO) are up 7.2% and 19.6% respectively.
However, BHP currently presents the lowest dividend yield at 9.1% out of the three listed above. The other two mining giants are offering 13.5% and 12.4%.
