December 20, 2018 Read More →

Major insurers back away from Adani’s planned Carmichael mine in Australia

S&P Global Market Intelligence ($):

A group aggressively working across the globe to push insurance companies away from the coal sector say some of the world’s largest insurers will not be covering Adani Mining Pty Ltd’s controversial Carmichael coal mine in Australia.

Ten of the world’s top insurance companies have explicitly refused to insure the mine or have previously pledged not to provide cover for new coal projects, the Unfriend Coal campaign announced Dec. 19. The revelation followed the Adani Enterprises Ltd. unit’s recent announcement the company would be self-financing the project after revising its mining plan to simplify construction and reduce the initial capital requirements for the mine and associated infrastructure.

“If insurance companies are serious about combatting climate change and aligning their business with the Paris climate agreement, this is an important test case for them,” said Peter Bosshard, director of the finance program for The Sunrise Project and a coordinator of the Unfriend Coal campaign. “There’s a large enough number of insurers who haven’t committed one way or the other so it’s not impossible [the Carmichael mine project] can go further, but I think there’s a decent chance they can’t get insurance for the project. They didn’t manage to secure finance because I think everybody realizes this is a really toxic project.”

The list of insurance companies includes what the campaign said was the first major U.S. insurer to take action on coal, Factory Mutual Insurance Co. One company, London-based Beazley Group Ltd wrote back to the campaign that it has no direct involvement with the project “having declined the risk when it was presented earlier this year.”

Similarly, Australia-based QBE Insurance Group Ltd.’s chief risk officer Peter Grewal responded to the campaign with a letter saying that while it will not discuss specific customer relationships, it can confirm that it does not provide services to the proposed Carmichael project and will not do so in the future.

More than 37 global financial institutions, including all of Australia’s major banks, had publicly turned down involvement with the $1.5 billion project, the campaign said in its announcement. Still, Adani recently said it would immediately begin to work on developing the mine and is working with regulators to finalize hurdles to breaking ground on the project.

More ($): Major insurers tell campaign they will not be backing large Australian coal mine

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