Whitehaven Coal

In February 2020, a group of 12 banks refinanced a $1 billion corporate revolver loan for Whitehaven Coal. This loan was first inked in early 2013, with Commonwealth Bank and ANZ dropping out of the loan in 2015 and 2020 respectively. Also in 2020, Nippon Export and Investment Insurance (NEXI), a Japanese state owned insurance corporation, along with MUFG and SMBC, participated in a separate $52 million loan to Whitehaven for mining equipment.

In July 2023, Whitehaven was unable to secure refinance for its corporate revolver. The loan facility included lending commitments from Australia’s big banks NAB and Westpac, as well as Japanese megabanks Mizuho, MUFG and SMBC among a group of 13 total lenders. This failure to renew marks the end of ten years of financial backing from major banks.

In October 2023, now forced to go overseas for finance, major US banks Jefferies Group and Bank of America loaned Whitehaven $900 million as a part of a deal to acquire the Daunia and Blackwater mines from BHP. Whitehaven is confident that with the addition of metallurgical coal to its portfolio, it will be able to attract finance from overseas.

Whitehaven has also repeatedly declared its intention to raise up to $1 billion in the bond market. In 2021, Deutsche Bank was reportedly arranging this finance, but has since abandoned the deal. It is not known which other banks may be involved.

Any bank still willing to finance Whitehaven with its existing coal expansion plans is undermining the 1.5ºC goal of the Paris Agreement and net-zero emissions by 2050.

Many of the banks and investors financing Whitehaven have publicly stated their support for the Paris Agreement and the goal of achieving net zero emissions by 2050. The International Energy Agency reiterated in its 2023 update to its net zero roadmap 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. According to its modelling, about 80% of coal reserves cannot be extracted and burned to limit warming to 2°C and significantly more reserves must remain in the ground to limit warming to 1.5°C. 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 78% between 2020 and 2030

In stark contrast, Whitehaven is planning to spend around $4.9 billion on three new coal mines and expansions: Vickery, Narrabri Stage 3 and Winchester South. In June 2023, the company lodged an application to extend the life of its controversial Maules Creek coal mine by another nine years. Additionally, in its acquisition of the Blackwater and Daunia mines from BHP, Whitehaven confirmed one of the other assets it received was the mining tenements for the Blackwater South project, a huge mine that would see Whitehaven mining coal until 2121 if approved. If all of these projects proceed as planned, when emissions from digging up and burning the coal are added, over their lifetimes these mines would unleash some 3.6 billion tonnes of carbon emissions, the equivalent of more than 7.5 times Australia’s annual emissions.

In the last decade Whitehaven has more than doubled its production. With its acquisition of Daunia and Blackwater, Whitehaven has again doubled its managed production. Whitehaven’s expansion projects, Narrabri Stage 3, Vickery, Maules Creek Extension, and Winchester South would see another massive expansion in its coal production, with the company’s own data showing plans to sustain very high levels of production through to 2040 and beyond.

Whitehaven’s historical and projected coal production
Saleable coal, equity-weighted

To justify its dirty coal expansion plans, Whitehaven refers to coal demand scenarios that assume substantially higher coal consumption than in the IEA’s STEPS scenario, which would already result in 2.4°C 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.

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.

As of September 2023, Whitehaven was still in court, this time for four different allegations, one being “blasting in an incompetent manner” that allegedly impacted a worker 3 kilometres away at another coal mine in Boggabri.

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.