Major French banks rule out Galilee coal investment. Meanwhile, in Australia…

Australia’s big four banks have come under renewed pressure to rule out financing the development of mega-coal mines in Queensland’s Galilee Basin and associated Abbot Point port and rail expansion, after France’s three biggest banks became the latest to reject investment in the controversial projects.

In separate letters to Friends of the Earth France, BNP Paribas, Societe Generale, and Credit Agricole all said that they would not finance proposed coal mines in the Galilee Basin or their associated infrastructure.

The new commitments bring the total number of big banks to formally boycott the coal projects to 10, including US banking giants Citigroup, Goldman Sachs and JPMorgan, as well as HSBC, Deutsche Bank, Barclays, and the Royal Bank of Scotland.

Like those before them, the French banks rank among some of the world’s biggest lenders to the coal industry: BNP Paribas has been the fifth biggest lender to coal mining in Australia since 2008; and by country of origin, France is the fifth biggest source of debt finance to the Australian fossil fuel industry.

But the Galilee projects – mostly owned by debt-ridden Indian coal conglomerate Adani Resources – have been highly criticised for the environmental threat they pose to the nearby World Heritage-listed Great Barrier Reef, and for the sheer quantity of heavy-polluting coal they would introduce into a struggling market and a world battling catastrophic climate change.galilee

Most importantly, though, from a market perspective, they have been deemed economically unviable, as the already bad financial outlook for new coal proposals become steadily worse.

But the weight of evidence against new coal development was not enough to stop the newly elected Queensland Labor government from giving the Galilee projects the green light – albeit, without funding – and has so far failed to move Australia’s Big Four banks to rule out financial support.

It’s a position that confounds market analysts and environmentalists alike – but one that is undoubtedly buoyed by the federal government’s unwavering support of all things coal.

“That so many of the world’s biggest lenders to the coal industry can come out and public declare themselves as not involved speaks volumes about how unacceptable this project is from an environmental, reputational and economic standpoint,” said Market Forces Lead Campaigner Julien Vincent in a statement on Thursday.

“It is astounding that banks based in New York, Paris, Edinburgh and Frankfurt are doing more to defend the Reef and climate from new coal project than our own Aussie banks.”

Australian Greens leader Christine Milne said the French banks’ decision highlighted the economic and reputational risks attached to the projects.

“This project is a flashing ‘stranded-asset’ light to global investors,” Senator Milne said in a statement.

“These French banks are some of the world’s biggest coal industry lenders and even they can see that investing in the Galilee Basin coal mines is environmentally and financially reckless,” she said.

Global fossil fuel divestment campaigner, 350.org, has seized the opportunity to call on Australian banks to follow the lead of the French banks, with a particular focus on the Commonwealth Bank – which has been advising and looking to finance Adani.

“Any project which is based on doubling down on coal at a time when the world’s biggest economies are taking active steps to reduce their reliance on fossil fuels is doomed to failure,” said Blair Palese, CEO of 350.org Australia.

“The choice for CommBank is clear — they can either heed the community’s concerns and join with the other banks in ruling out funding for these projects or they’ll face sustained actions at branches across the country.”

The 350.org Australia campaign will being with a week of “actions” at dozens of CommBank branches around the country from 19-23 May.

Comments

13 responses to “Major French banks rule out Galilee coal investment. Meanwhile, in Australia…”

  1. Pedro Avatar
    Pedro

    Below is the web address if you want to put pressure on Australia’s big four banks

    http://action.marketforces.org.au/page/speakout/join-the-world-ditch-galilee-coal?js=false

    1. Concerned Avatar
      Concerned

      Funny thing,all the Banks mentioned were never approached.So how honest is that story?

      1. Pedro Avatar
        Pedro

        I know the Australian banks in the article were approached long ago.

        Where did you get your information from?

        1. Concerned Avatar
          Concerned

          “These three banks play a very significant role in financing the fossil fuel industry in Australia, particularly coal mining,” said Julien Vincent from environmental group Market Forces.

          A spokesman for Adani said the company has not seen the letters, but that it has never approached the three banks for funding.

          He added that the company continues to progress financing arrangements for the project

          1. Pedro Avatar
            Pedro

            Appears I got my wires crossed. I thought you meant that the Australian big 4 banks were not approached by Market forces or 350.org to rule out funding the Galilee coal project.

  2. Alen T Avatar
    Alen T

    It’s a more optimistic view from Clive Palmer’s perspective, and the Warratah Coal’s ambition to build a mine in the Galilee basin. If banks won’t back him, his Chinese partners can always help him out…that’s assuming they’re still in the dark about the money he withdrew for the 2013 campaign and his comments on Q&A (slim chance that).

    Keep up the good work 350.org and all other groups fighting for the reef. I for one am grateful for your efforts.

    1. mike flanagan Avatar
      mike flanagan

      He had two or three goes at floating Waratah on the Hong Kong stock exchange for ever decreasing capital valuations and all have been rejected by astute investors to the point the floats have been withdrawn.
      Rinehart’s Hancock Prospecting wrote off the half a billion dollar of the last tranche for the sale to GVK last year and that section of the Galilee’s development is highly problematic.
      If the Australian Banks decide to back this project it will be a display of suicidal arrogance by their boards, and the public and many of their shareholders will never forgive them for, until they are all removed or dismissed.

      1. john Avatar
        john

        I will of course advise the board of Westpac and CBA and NAB of my dismay, which will have zero impact.

        1. mike flanagan Avatar
          mike flanagan

          I already have John to receive IT generated letters of acknowledgment claiming unsubstantiated claims of environmental responsibility and hiding behind the meaningless nostrum of ‘client confidentiality’, when the rapist of our environment are doing it via the communities’ resource assets. Needless to say I replied to each of their meaningless memes with a lengthy demand for evidence and verification of their assertions and am awaiting their replies.

    2. john Avatar
      john

      I honestly do not think even his backers will come up with the money for this.
      I ask you would you back a company which can not deliver a product for under $80 a tonne and it is getting below $40 hmm no is my answer.

  3. john Avatar
    john

    Lets look at the figures.
    Mine $15
    Rail $35
    Port $2.50
    Ship $12
    Subtotal = $64.50
    $16 billion Capex
    cost per tonne over 30 years @ 4% cost = $17.75
    So ok this is a figure of $82.25
    Now nothing is allowed for Admin and R&M so I expect we can add at least $5 to that.
    Notice no figure for repayment of capital borrowing in the above.
    So lets offer the product into the Indian market it is good quality and we need at least $80 a tonne.
    Low quality product is fetching $55 a tonne so lets give the better product a $20 bonus we are still short of the value needed for the product.
    Cut and dice the figures any way you like I find it extremely hard to see how this is viable for thermal coal.

    1. neroden Avatar
      neroden

      Thermal coal is becoming non-viable worldwide. (Metallurgical coal commands much higher prices.)

      1. john Avatar
        john

        Met coal always has got a better price but not as plentiful with good quality.
        I still find it hard to reconcile the operation with a 388 km railroad to be built and operated.

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