WHITEHAVEN COAL

Banks that have loaned to Whitehaven Coal

In February 2020, a group of 12 banks loaned a combined $1 billion to Whitehaven Coal. Also in 2020, Nippon Export and Investment Insurance (NEXI) participated in a separate $52 million loan to Whitehaven, along with two other undisclosed banks.  Whitehaven plans to refinance its $1 billion debt facility in 2022, meaning these financial institutions could soon be approached to provide more finance.

Separately, Whitehaven has declared its intention to raise up to $1 billion in bonds later this year. Deutsche Bank was reportedly arranging this finance, but has since abandoned the deal. It is not known which other banks may be involved.

The financial institutions enabling Whitehaven’s plans to continue expanding the coal industry are backing a company whose plans undermine the 1.5ºC goal of the Paris Agreement.

Note: While Bank of China and Mizuho have policies ruling out finance for new coal mining and thermal coal mining projects respectively, the banks have failed to rule out funding for coal companies such as Whitehaven. While NAB claims it will no longer fund new thermal coal mining projects, it has breached this policy and in any case remains open to funding coal companies such as Whitehaven. Any lending to Whitehaven, whether characterised as being for new or existing projects, supports an undiversified coal miner pursuing new coal projects.

Super funds failing to rule out investment in Whitehaven Coal

Planning for climate catastrophe

Many of the banks funding Whitehaven have publicly stated their support for the Paris Agreement and the goal of achieving net zero emissions by 2050. The International Energy Agency has confirmed that reaching net zero emissions by 2050 means no new coal mines or expansions can proceed:

Similarly, the latest Intergovernmental Panel on Climate Change (IPCC) report again highlighted the need for coal supply to urgently and dramatically decline. Under its low or no overshoot 1.5ºC aligned models, coal use falls 75% by 2030 and 95% by 2050 (on 2019 levels). This is consistent with other studies which have concluded limiting global warming to 1.5ºC means 95% of Australia’s coal reserves must remain unburned, and coal supply must decline 11% every year between 2020 and 2030.

In stark contrast, Whitehaven is planning to spend around $2 billion on three new coal mines and expansions: Vickery, Narrabri Stage 3 and Winchester South. These mines have marketable coal reserves of almost 500 million tonnes. When emissions from digging up and burning the coal are added, over their lifetimes these three mines would unleash over 1.1 billion tonnes of carbon emissions, the equivalent of more than twice Australia’s annual emissions.

In the last decade Whitehaven has more than doubled its production. At the company’s 2021 AGM, CEO Paul Flynn confirmed Whitehaven could more than double its coal production again by 2030 through these new coal projects. Whitehaven’s own data shows the company is planning to double coal production by 2030 and sustain very high levels of production through to 2040.

To justify future demand for its dirty coal, Whitehaven refers to coal demand scenarios that rely on the failure of the Paris Agreement and are consistent with almost 3ºC of global warming by 2100. Even at 2°C of warming, the expected increases in temperatures, drought conditions, bushfires, extreme storms and flooding in Australia would be devastating. Global warming of 2ºC would also spell the death of the Great Barrier Reef.

Put simply, Whitehaven’s business model depends on catastrophic ecological, social and economic collapse.

Destroying the environment and breaking the law

Whitehaven’s existing Maules Creek coal mine is one of Australia’s most controversial mining projects and was strongly opposed by local farmers and Gomeroi traditional owners. Despite a massive community campaign that included a two year blockade, Whitehaven bulldozed hundreds of hectares of critically endangered forest that provide important habitat for rare and endangered species like the Superb Parrot, Regent Honeyeater and Squirrel Glider. 

Whitehaven assured the government that it could “offset” the loss of this woodland by buying and protecting other areas of habitat. Six years later, Whitehaven had not kept its promises, even after being granted multiple extensions by the federal government. In 2021, after a legal challenge by the South East Forest Alliance, the government again varied Whitehaven’s conditions of approval to grant the company a further three years to secure the necessary offsets.

Farmers near the Maules Creek coal mine are also deeply concerned that Whitehaven’s water use is drying out streams and bores. Local farmers have been repeatedly outbid on water licences with Whitehaven paying five times the market value at times for water. In April 2021, Whitehaven pleaded guilty to taking one billion litres of water during a severe drought in New South Wales.

This is not the first time Whitehaven has broken the law. The company’s mines are renowned for a litany of environmental breaches, many of which Whitehaven sought to keep secret. The incidents range in severity but many involve breaches of conditions that are imposed to protect communities and the environment from the impacts of mining. In August 2021, Whitehaven was fined $372,500 for 19 breaches of its licence, including failures to rehabilitate drill sites and drilling bores that did not meet approval conditions.

Lock the Gate Alliance has compiled a comprehensive list of Whitehaven’s law-breaking over the last 10 years. This compilation shows the company and its subsidiaries have been found guilty or investigated 35 times and incurred almost $1.5 million in total penalties.

Credit: Lock the Gate Alliance

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