By Cecilia Jamasmie
May 1, 2017 - As "strange" and "disappointing" qualified Australia’s Federal Finance Minister Mathias Cormann the decision by the country’s four biggest banks to rule out or withdraw funding for Adani’s Carmichael coal mine and rail project.
The lenders’ move follow a decision by Australia’s second-largest bank Westpac, unveiled on Friday, to only fund new projects in existing, rather than new coal basins.
Westpac’s resolution, part of its new climate policy, effectively blocked funding to Adani’s project in central Queensland, poised to become the country’s largest coal mine.
Australia’s four biggest banks decision comes on the heels Westpac's new climate policy that only considers funding for new projects in existing, rather than new, coal basins.
Corman said that while banks had the right to make their own lending decisions, coal remained Australia’s second-largest export. He also noted the move will affect another six coal projects in the Galilee Basin, or about 16,000 jobs, The Guardian reports.
“[Westpac decision to rule out lending to new coal basin developments] appears to have been carefully crafted to rule out support for new projects in Queensland’s Galilee Basin, including the Adani Carmichael project,” Brendan Pearson, Chief Executive of Minerals Council of Australia, said in statement.
“The fact is that Australian coal exports from the Galilee Basin will support the provision of low emissions energy to hundreds of millions of people in Asia, including tens of millions in India who will have access to electricity for the first time,” Pearson noted. “This coal will displace lower quality local coal in new high efficiency low emissions power generation.”
Prime minister Malcolm Turnbull also criticized Westpac’s decision, adding that coal projects should be “examined on their merits,” Sky News reports.
The $16bn (A$21bn) Carmichael project has faced relentless opposition from organizations ranging from the United Nations to green groups fighting new coal projects, which prompted the company to cut underground mining capacity by 38%.
Galilee Basin coal export projects map.
Map courtesy of GalileeBasin.org
Opponents worry the development could harm the Great Barrier Reef and jeopardize vulnerable species including a lizard known as the yakka skink.
Despite legal hurdles, the project was finally approved in October 2015 under what environment minister Greg Hunt called “the strictest conditions in Australian history."
Adani Group said last year that legal costs and cutting its way through the environmental snags that delayed the first phase of the mine had cost it more than $120 million.
According to official estimations, Carmichael will contribute $2.97bn each year to Queensland’s economy and has the potential to create 6,400 new jobs: around 2,500 construction positions and 3,900 operational posts.
The project is meant to produce 60 million tonnes of thermal coal a year for export, fuelling this way power generation for 100 million Indians.