Lending to coal mines
Share this page
Australia is the world’s biggest coal exporter, digging up hundreds of millions of tonnes each year. If our national carbon footprint were calculated including emissions from exported coal, it would almost triple.
As well as driving dangerous global warming, coal mining also creates local environmental havoc, including the destruction of forests and farmland, reduced water availability and quality, and toxic air pollution.
We have identified over $11 billion worth of loans to the Australian coal mining sector since 2008, with $3.7b coming from the big four banks.
Top lenders to coal mining in Australia 2008-2016
Is your bank on the list?
Tell them if they continue to choose fossil fuels, you’ll choose a new bank.
Since August 2012, a community presence at Maules Creek has hampered Whitehaven Coal’s ability to construct the mine and it is now unclear whether they will meet their deadline to start exports. Community groups, religious leaders, health professionals, farmers, former employees of mining and government, and traditional owners have all worked hard to resist the mine’s construction.
At ANZ’s 2013 Annual General Meeting, activists, shareholders, farmers and traditional owners attended to raise questions of ANZ’s lead role in Maules Creek. It led to the ANZ Chairman shutting down questions, including from traditional owners who had travelled 700 km to be at the meeting in Brisbane.Read more about ANZ’s AGM to remember here.
But some unhappy locals and activists at their AGM are likely to be the least of ANZ’s worries. With a falling coal price and the risk of Maules Creek not commencing on time, ANZ and other lenders to Maules Creek risk losing out as the company struggles to move coal out and earn enough to cover the loan’s interest. If nothing else, Maules Creek will be a major lesson to investors about the increased risks in coal mine lending.
If the Galilee Basin is opened up it would double Australia’s coal exports on its own, and account for 7% of the entire world’s remaining carbon budget under a less than two degrees warming scenario. While the environmental stakes are in the extreme, so are the financial risks. With the Galilee Basin so far from existing coal export infrastructure and many finance and commodities analysts forecasting the downward trend in coal demand to continue, there is a very real risk that the Galilee Basin coal mines would become multi-billion dollar stranded assets.
UK-based Standard Chartered, assisted by Commonwealth Bank, was advising Adani on its Carmichael project, and provided $680 million in debt. However, both of these banks have since distanced themselves from the project, acknowledging the significant environmental and economic threats it poses.
NAB has also joined the growing ranks of institutions that have ruled out funding Carmichael, stating that it “is not involved and has no plans to be involved in any financing for the Carmichael coal mine.” Click here to read more about NAB’s announcement. Westpac’s April 2017 climate policy update also effectively rules the bank out of funding Carmichael.
CommBank has a previous relationship with Adani, raising concerns the bank may help this dirty project go ahead. Use the form below to tell CommBank to keep up with the other major banks around the world that have ruled out support for Galilee coal export projects.