July 5, 2017 Read More →

Banks Aren’t Interested in Adani’s Plans for Queensland Mines

Kiran Stacey, Simon Mundy and Jamie Smyth for Financial Times:

Gautam Adani, the Indian billionaire, is facing questions over the funding for the planned A$16.5bn coal mine in Australia weeks after his company gave the final go-ahead for the long-delayed scheme.

Indian conglomerate Adani Group announced final approval for the huge Carmichael development on June 6, with Mr Adani saying: “I am proud to announce the official start of one of the largest single infrastructure and job-creating developments in Australia’s recent history.”

But so far no bank has expressed interest in funding the project, which involves a mine, a port and a railway in the state of Queensland and is projected to cost around A$16.5bn.

Mr Adani has admitted the company still faces problems finding financing. Some banks are worried about the reputational risks of being involved in a large coal project, and others about the risks of funding what could turn out to be a giant stranded asset.

Mr Adani, who has already sunk A$3.5bn (US$2.7bn) into the project, said: “We have been challenged by activists in the courts, in inner city streets, and even outside banks that have not even been approached to finance the project.”

Green activists claim 21 banks have so far ruled out financing it. Deutsche and HSBC have said they would not fund Adani’s project, following a successful lobbying campaign that focused on the fact that coal from Carmichael would have to be shipped across the Great Barrier Reef, risking damage to the world heritage area.

National Australia Bank said in 2015 it would focus on funding renewable energy while Westpac has said it will only finance “existing coal producing basins”. Deutsche in January ruled out funding any new greenfield coal mines.

Australia’s big banks say they have not received any formal requests from Adani Group to fund the Carmichael mine. But they admit privately that this is because they have signalled behind the scenes that they would reject any such request.

Full article:  $ https://www.ft.com/content/c158fc18-51b4-11e7-bfb8-997009366969

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