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Korean lenders rule out Adani!

5 November 2018

5 November 2018

Three Korean financial institutions have ruled out investing in the Adani Carmichael coal mine, rail line or Abbot Point coal export terminal, as confirmed in emails to the Wangan and Jagalingou (W&J) Traditional Owners Council.

The W&J traditional owners are visiting Korea this week, supported by Market Forces. In letters requesting meetings with major lenders and asset managers, the W&J made clear they have not given their free, prior and informed consent to Adani for the Carmichael mine. As a result, any institution that supports Adani through direct finance, or an investment in the Abbot Point coal export port would be complicit in breaching the W&J's human rights.

The W&J will be in Korea this week to visit other financial institutions that have so far not positively responded to their requests. These include Mirae Asset Daewoo, the asset management firm that in July refinanced AU$330 million in the debt to Abbot Point, and the Korean National Pension Service.

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Korean commitments

Three responses were received last week, from the Korean Development Bank, its infrastructure investment arm "KIAMCO", and the Korean Export Import Bank. They said:

"Regarding the development and building of the Carmichael Coal Mine, Rail and Port Project in Australia proposed by Adani Mining Pty Ltd (“Project”), ... we are no longer reviewing it. We wish to express that we have no intent to provide finance for the Project."
Korea Development Bank
"Please be assured that Korea Eximbank does not have any intent to provide financial support to the Carmichael project, which includes the development of mine, rail and the port of Abbot point."
Korea Export Import Bank
"We deeply conform the responsibility of financial investors and have well understood the importance and concerns for the development of the Carmichael mine on the W&J’s ancestral lands. We, KDB Infrastructure Asset Management Co. Ltd., hereby confirm that we have no intention to participate by all means, financial or other support or services, in the development of the Carmichael mine."

You can view the emails from the Korean institutions to the W&J here.

They take the total number of financial institutions to rule out support for Adani's Carmichael project to 35 and, with Adani attempting to raise capital by selling part of the Abbot Point coal export port, their refusal to invest in the port is a critical development.

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The role of Korean finance

Adani has had an on again, off again relationship with Korean investors and companies but recently, this has escalated to the point where some direct intervention has been necessary.

In October, Market Forces revealed through Freedom of Information that, after Adani organised for the Korean Export Import Bank to meet Australia's Department of Foreign Affairs and Trade, a memo from Seoul to Canberra confirmed the Korean government would encourage its financial institutions and companies to back the Carmichael project.

Since then, the new Moon Administration has taken a more progressive approach to climate, energy and coal issues but Adani has remained keen on Korean finance.

In May it was reported Adani had engaged Rothschild to advise on a partial sale of the Abbot Point coal export terminal, which Adani owns on a 99-year lease. Selling up to half the port could net Adani hundreds of millions of dollars in desperately needed equity, which it could then redeploy for the Carmichael mine or rail project.

On 14 September, the Courier Mail reported Adani was holding talks with Korean finance companies” and hoping to complete a deal within months. If successful, Adani could raise hundreds of millions of dollars with an equity stake sale of Abbot Point, bringing them much closer to financial close for the mine and rail project. 

In July, Mirae Asset Daewoo refinanced AU$330 million of the debt to Adani's Abbot Point coal export terminal, on-selling the debt to NH-Amundi, a Korean insurer.  These companies are major priorities for the W&J's visit this week.

Fighting back

Australians have responded to the risk of Korean involvement in the Adani Carmichael mine by calling on Korean investors directly through email, and via the Australian Embassy, to avoid investing in Adani's disastrous Carmichael coal mine.

On 10 October, dozens of Canberrans turned out to the Korean Embassy to urge the government to warn Korean companies of the reputational risk they would be exposed to if they financed Adani's Carmichael project.

It seems the message has got through in part, but still, Mirae Asset Daewoo, the National Pension Service and NH-Amundi have failed to rule themselves out of supporting Adani so this week they can expect a visit from the W&J.