Home > Meet the new bank of choice for Australian coal miners – Jefferies Group

Meet the new bank of choice for Australian coal miners – Jefferies Group

28 March 2024

Today is the annual general meeting of Jefferies Group, one of Whitehaven Coal’s most recent bankers. In the last few years, Jefferies has come up as a new bank of choice for other Australian coal companies in Australia.

We first took note of the up and coming investment bank in 2021 when the bank underwrote a convertible notes offering for New Hope Group.

Next, Jefferies popped up as a banker for Adani Enterprises – the parent company that owns the Carmichael project. It was one of the few non-Indian banks involved in the early 2023 equity raising that was torpedoed by Hindenburg Research’s findings.

Finally, late last year Jefferies, along with Bank of America, provided a $900 million dollar loan to Whitehaven Coal, after other major global banks declined to renew Whitehaven’s revolver loan just months before..

This is the behaviour of a bank that seems happy to prioritise profit over the planet.

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Richard Handler, CEO, Jefferies Group
Brian P. Friedman, President, Jefferies Group

I am very concerned that Jefferies may again arrange finance for Whitehaven Coal – an undiversified coal mining company pursuing five new or expanded coal mining projects – despite your bank’s concern over climate change:

“Climate change is currently one of the top-tier risks to humanity and poses significant challenges for the global economy” – Jefferies 2024 Sustainability Report

I want you to confirm that Jefferies will take no further part in arranging finance for Whitehaven, or other companies expanding the coal industry, one of the major contributors to climate change.
Any expansion of the coal industry is incompatible with the climate goals of the Paris Agreement, which aims to limit global warming to 1.5˚C above pre-industrial levels. It is also incompatible with the International Energy Agency’s (IEA) Net Zero by 2050 modelling, which sees “no new coal mines or mine extensions”. Yet Whitehaven Coal is pushing forward with three thermal coal developments; Narrabri Stage 3, a full scale Vickery mine, and the Maules Creek Extension, when the world desperately needs to transition to clean, renewable energy sources. Whitehaven also now owns two of the largest greenfield metallurgical coal mine proposals in Australia – Winchester South and Blackwater South. If the latter project goes ahead it could see Whitehaven mining coal until 2121.

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 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.

Not only is Whitehaven wrecking our climate, it also has a long history of destroying the local environment and communities where it operates, with a list of convictions racking up nearly $1.5 million in fines as of September 2021. In September of this year, the company was still in court “for blasting in an incompetent manner” that injured a miner at a completely different mine site. For years, local farmers have raised concerns that Whitehaven’s coal mines have been unlawfully taking water without a licence, including during severe drought. In July 2021, Whitehaven pleaded guilty to taking one billion litres of water at its Maules Creek coal mines. Even where Whitehaven has lawfully obtained its water, it has sometimes done so at the expense of local farmers by outbidding them on the water trading market.

Whitehaven has said it plans to self-fund Narrabri Stage 3 and a final investment decision on “full scale” Vickery was due after the Blackwater and Daunia acquisition settlement. Any finance provided to the company for this acquisition frees up capital to develop new and expanded coal mines that are incompatible with the Paris climate goals.

I ask you to confirm to me personally, and announce publicly, that you will take no further part in arranging finance for Whitehaven Coal, or other companies pursuing plans consistent with the failure of the Paris Agreement.

Further information about Whitehaven Coal can be found on the Market Forces website: www.marketforces.org.au/whitehaven-coal

Sincerely,

Yes, of course I want to hear more from Market Forces about this campaign

Yes, I want to hear more from Market Forces about this campaign

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TOOK ACTION: Jefferies Bank and Whitehaven Coal Action – Mar 2024

Send a message to Jefferies and its investors on the company’s social media today:

Twitter

You can write your own personal (and polite!) message, or copy-paste the messages below, which reference Jefferies’ sustainability claims. Please make sure you tag @Jefferies.

@Jefferies please rule out any more funding for Whitehaven Coal, and other companies expanding the fossil fuel industry!
@Jefferies says it cares about being a good corporate citizen, so why would it bank Whitehaven Coal, one of Australia’s biggest climate wreckers?
If @Jefferies strives to “Always do the right thing”, why lend to companies like Whitehaven Coal with its massive plans to expand coal which are at odds with global climate goals?
@Jefferies: set a good example for other banks, stop funding dirty coal!
Please leave the PLANET cleaner than when you found it – @Jefferies end finance for companies expanding climate wrecking coal!

Don’t use social media? Send a message to the Jefferies CEO instead using the action form on this page.

As banks all over the world start cutting off lending to coal miners, Jefferies Group stands out as a clear climate laggard, apparently willing to be the lender of last resort for these polluting companies.

The good news is that many other banks, like NAB, Deutsche Bank and Westpac, have recently walked away from Whitehaven. In December, the company had to turn to the private credit market for further finance, facing much higher interest rates as a result.

With Whitehaven still working out how to pay for a “full scale” Vickery mine and its greenfield Winchester South projects, Whitehaven has indicated it would like to turn to the bond market for finance. And guess which bank arranges bonds for coal miners? That’s right, Jefferies.

Let’s turn up the heat on Jefferies. Let’s end finance for coal expansion for good!