16 May 2019
In May 2018 it was revealed that French investment bank Rothschild and Co was helping Adani to sell a minority stake in the Abbot Point coal terminal on the North Queensland coast. The terminal would act as the port through which coal from the proposed Carmichael coal mine would be transported. The partial sale of the Abbot Point coal terminal would enable Adani to raise hundreds of millions of dollars in funds, which could then be redeployed to enable financing of the Carmichael coal mine and rail line.
That relationship has now come to an end. In a letter to Friends of the Earth France received this week, Rothschild states that it is:
“…no longer advising Adani in relation to the sale of an ownership stake in the Abbot Point coal export port”.
After it emerged that Rothschild & Co was working for Adani – helping it find the funds that are crucial for the Carmichael mine to be built – groups in both Australia and France (home of Rothschild & Co) began to mobilise. Here in Australia, people supported the campaign by petitioning Rothschild to withdraw from working with Adani via the Market Forces ‘Adani List’ action (scroll down to do it too!).
Rothschild is yet to publicly announce that it will no longer work with Adani in any capacity going forward. We urge Rothschild to make the commitment that it is out of the Adani Carmichael project for good.
So far, 53 major banks, insurance firms and engineering consultancies have publicly refused to work with Adani, including Australia’s big four banks and major insurers QBE and Suncorp. The sale of the port is now probably on ice, making it more difficult for Adani to raise the requisite funding to complete the Carmichael project. With Rothschild & Co (for now), adding their name to the growing list of companies refusing to work with Adani, the project currently has no clear plan for funding.
The Abbot Point coal terminal was acquired by Adani in 2011 and was purchased on a 99-year lease at $1.83 billion. In 2011, around the time of Adani’s purchase of Abbot Point, Australian thermal coal was fetching a high of US$132.48 per tonne. By January 2016 thermal coal had slumped to US$49.20 per tonne. By July 2018 with great variability and associated peaks and troughs, thermal coal recovered to US$119.57 per tonne and has since been in rapid decline to March 2019 where it sits at US$93.12 per tonne.
Even during times of high coal prices, Abbot Point coal port remains under-utilised. This is reflected in Adani’s lack of success in finding a buyer for the port since 2014. Around 25 million tonnes of coal passed through the Abbot Point coal terminal per year during 2016-2017 and 28 million tonnes during 2018. The port currently has a capacity of 50 million tonnes per year and Adani intends to expand that to 60 million tonnes.
Last November, Adani announced plans to self-finance the first stage of the Carmichael mine and rail line, at an estimated cost of US$1.5 billion. The ability for Adani to self-finance the project becomes a lot harder with Rothschild & Co quitting its role. The Carmichael coal mine has been shown not to stack up economically, environmentally or socially. Rothschild & Co walking away from Adani highlights the lack of economic viability associated with the project and Adani’s inability to raise the requisite funds. With the associated lack of funding for the project and a groundswell of activists and companies in opposition to the mine, the project is becoming increasingly harder to justify.
The Carmichael project is the opposite of what needs to be done in the midst of a climate emergency. While this is the case, the fight to #StopAdani will go on.
Ask the companies currently working with Adani to join Rothschild and walk away.