'Desperate': Commbank Rules Out Lending To Adani's Carmichael Coal Mine

Fairfax - Peter Hannam

The Commonwealth Bank has ruled out lending money to the proposed Carmichael mega coal mine in Queensland in a move green groups say adds pressure on the federal government to run out loans of its own.
A bank spokeswoman confirmed Australia's biggest lender would not be making loans to the Adani mine proposed for the Galilee Basin. The initial thermal coal mine requires about $4 billion, but later expansion could require as much as five times that investment.

Protestors wearing suits resembling Prime Minister Malcolm Turnbull and Adani chief, Gautam Adani, take part in a protest in Canberra on Thursday. Photo: Alex Ellinghausen

"Whilst in general we do not comment on specific clients, we can confirm that we are not amongst the banks who have been, or will be, asked to consider this financing," she said.
A spokesman for Indian-owned Adani said the miner "welcomes CBA's clarification and confirmation of their view", adding it was in line with the bank's stance earlier this year.
"Adani has not and does not intend to approach CBA for project finance," he said. "Adani is well-advanced in discussions with international financial institutions re project finance."
However, Julian Vincent, executive director of anti-coal mining group Market Forces, said the bank's move would dent Adani's prospects for raising funds.
"These are desperate times for Adani," Mr Vincent said. "[CBA] plays an important financing role but a critical credibility role."
The big four banks – which include NAB, ANZ and Westpac – had supplied 75 per cent of project finance for fossil fuel ventures in Australia over the past decade, Market Forces data shows.

Adani copped a $12,000 fine for releasing eight times its licensed concentration of pollution from its Abbot Point coal terminal. Photo: Glenn Hunt

Mr Vincent said that with Indian banks increasingly wary of taking on more risky ventures, the viability of the Adani mine could hinge on the federal Northern Australia Infrastructure Facility (NAIF) – which is mulling a $1 billion loan to help fund a rail line to the coast – and the Chinese debt market.
The NAIF "is really the big game changer", Mr Vincent said.
Bank exposure to fossil fuels drew attention from the Reserve Bank governor Philip Lowe, who told a parliamentary committee on Friday that Australia could have a lot of stranded assets if the Paris Agreement curbed demand. While not an immediate threat to financial stability, the issue would need watching over the long-term, he said.
"The RBA is now starting to think about stranded electricity assets and an Australia that exports less coal, which is more than Labor or Liberal governments are doing," Adam Bandt, Greens climate and energy spokesman, said.
"But the bank isn't yet on the same page as the financial regulator, APRA, which is ringing alarm bells and telling us 80 per cent of coal needs to stay in the ground."
Separately, Adani also copped some bad news with a $12,000 fine for releasing eight times its licensed concentration of pollution from its Abbot Point coal terminal during the aftermath of Cyclone Debbie in March.
"If Adani can't safely operate the Abbot Point coal terminal, how can they be trusted to build Australia's biggest coal mine?, Basha Stasak, Australian Conservation Foundation campaigner, said. "This is not a company that should be trusted with our Great Barrier Reef, our clean water or the fate of the endangered Black-throated finch."

Links

• Westpac branded as 'wimps' over coal pledge
• Carmichael coalmine: Commonwealth Bank indicates it will not lend to Adani
• CommBank must rule out all new coal - not just Adani's Carmichael mine
• Adani picks funding advisor for giant Australia coal mine -sources
• Adani says it might not need $1 billion in federal cash for Carmichael mine; real figure 'could be less than $500m'
• Enjoy it while you can: Australia's ski industry faces 'terrifying' future
• Sydney storm: erosion swallows 50 metres of Collaroy, Narrabeen beaches