8 April 2015
Three major French banks have announced they will not fund the mega coal mines proposed in the Galilee Basin, or associated infrastructure such as the new coal export terminals at Abbot Point.
BNP Paribas, Societe Generale, and Credit Agricole have issued statements that bring to eleven the number of international banks that have spoken out against the prospect of funding mega-coal mines in the Galilee Basin or new export terminals in the Great Barrier Reef World Heritage Area.
The commitments came in response to letters sent by Friends of the Earth France and after a long period of engagement by several environment groups. Market Forces Lead Campaigner Julien Vincent acknowledged the announcements as a major step forward for the campaign to keep the Galilee Basin coal in the ground. He said:
“When it comes to securing finance for their massive coal mine and export terminal, Adani are simply running out of options.
“That some of the world’s biggest lenders to the coal industry can come out and public declare themselves as not involved speaks volumes about how unacceptable this project is from an environmental, reputational and economic standpoint.
“However, while major international banks have demonstrated common sense on this issue, we are yet to see the same statements from Australia’s major banks. It is astounding that banks based in New York, Paris, Edinburgh and Frankfurt are doing more to defend the Reef and climate from new coal project than our own Aussie banks.
The importance of banks that have ruled out funding Galilee coal exports
With these new announcements, the total number of international banks that have ruled out funding part or all of the Galilee coal export supply chain has reached eleven. And when it comes to putting together major coal deals, these banks matter. Aside from Societe Generale, all of the banks that have ruled out funding part or all of the Galilee Basin supply chain are among the top twenty financiers of coal worldwide.
French banks also play a very active role in financing the Australian fuel industry. After a study of over $130 billion in debt finance to the fossil fuel industry in Australia since 2008, Market Forces has found that France is the fifth biggest source of finance, by country of bank origin.
BNP Paribas, Credit Agricole and Societe Generale play an especially prominent role as lenders to coal mining in Australia. Since January 2008, BNP Paribas has been the fifth largest commercial lender to coal mining in Australia, while the French banks are second only to Australian banks in terms of the number of deals participated in between 2008 and 2014.
This puts the proponents of new coal export projects from the Galilee Basin in a very difficult position. Not only do these announcements effectively remove a huge chunk of potential finance for mega mines such as Adani’s Carmichael mine, other banks will need to consider the reputational risk of funding a project that so many of their peers have publicly ruled out.
Top lenders to coal mining in Australia, 2008-2014
|Rank||Bank name||Total value of loans (AU$ millions)||Number of deals|
|1||Bank of China||3023.28||4|
|4||National Australia Bank||680.55||11|
|11||Bank of Tokyo-Mitsubishi||372.96||6|
|14||Sumitomo Mitsui Banking Corp||334.85||7|
|15||China Development Bank||333.59||1|
|16||Royal Bank of Scotland||308.66||7|
|19||Mizuho Financial Group||229.02||9|
|20||Oversea Chinese Banking Corp||228.63||4|
Where are the Australian banks?
While international banks continue to rule out finance for Galilee Basin coal mines and new export terminals at Abbot Point, the “big four” Australian banks have remained silent. This means that banks in New York, London, Paris and Edinburgh are effectively going more than Australian banks to stop the environmental and climate disaster-in-waiting that is the opening up of the Galilee to coal mining.