The Commonwealth Bank have joined 11 other international banks in cutting ties with Adani’s CarMichael coal project in a major blow to the project following a reversal in the Federal Court this week. The Commonwealth Bank was acting as Adani’s financial advisor in what would be Australia’s biggest coal mine.
The bank’s announcement came not too long after the Federal Court of Australia overturned the approval of the controversial project, which has faced fierce criticism from the public.
Market Forces Executive Director Julien Vincent said of the decision:
“This is a devastating blow to Adani, and leaves their plans to build Australia’s biggest coal mine and a new export terminal in the Great Barrier Reef hanging by a thread.
“As an adviser, Commonwealth Bank was in line to be a leading lender to Adani’s Carmichael mega coal mine. Adani has not just lost hundreds of millions of dollars in debt finance that CBA could have brought, but the credibility that a major Australian institution’s support brought to the project. That’s a bigger, more embarrassing blow and could cost this project billions of dollars.”
Adani may now find it significantly tougher to source investment from other banks, with $16 billion required to build the mine and the attending infrastructure to transport the coal to a port in Abbot Point in Queensland.
“Over the past day we have learned that the Carmichael coal project is not just without a banking partner in Australia, but also technically illegal. That doesn’t exactly make for a good sales pitch for a project supposed to reach financial close this year.
“Without an Australian bank on board, this project is going to be almost impossible to get off the ground. The question now is whether the other big banks will see sense and also rule out involvement in Adani’s coal export plans.
“We call on ANZ, Westpac and NAB to match what Commonwealth Bank has done, recognise that the Galilee Basin mega coal mines and new ports in the Reef are an environmental and financial disaster, and rule themselves out of providing support to Adani’s coal export plans.”