22 Jan 2013

ANZ Funds Big Coal Boom

By Julien Vincent
The global coal industry has 49 new projects in the pipeline thanks to loans from ANZ. All up, they will produce more coal a year than Australia currently does, writes Julien Vincent
After initially hitting Whitehaven Coal where it hurts, the ANZ media release hoax has seen a sustained backlash against the bank itself.

Last week, an action in Melbourne's CBD took the "don't fund new coal" message to ANZ. Online action group Sum of Us are running a petition urging ANZ to do what the hoax media release said and cancel the loan. On Monday many ANZ customers found their local cash machine "out of order" after activists stuck signs on ATMs around the country.

Good. And if ANZ doesn't change their lending policies, long may it continue.

Whitehaven Coal, recently $1.2 billion better off thanks to ANZ, are proposing several new coal mines. One proposed site, Maules Creek, would destroy about half of the Leard State forest, including important Koala habitat, to enable 13 million tonnes of coal per year to be mined for export.

It's a story being repeated throughout New South Wales and Queensland: bushland, prime agricultural land, environmentally sensitive areas and even natural icons like the Great Barrier Reef are standing between the coal industry and its plans to massively expand over the coming decade. There's also the fact that the proposed coal expansion would render it impossible to avoid catastrophic climate change, as this Greenpeace report concludes.

The repetition extends to the role of ANZ in bankrolling these environmentally destructive projects. Bloomberg data shows that since the middle of 2010 ANZ has been party to loans worth nearly $20 billion to companies actively driving the coal expansion in New South Wales and Queensland. These include:

  • US$3.5 billion (AU$3.3 billion) to Anglo American
  • AU$595 million to Centennial Coal
  • US$5 billion (AU$4.75 billion) to BHP Billiton
  • US$6 billion (AU$5.71 billion) to Rio Tinto
  • US$2 billion (AU$1.9 billion) from a $6 billion credit facility to Xstrata
  • US$1 billion (AU$0.95 billion) to Peabody Energy and, as is now famously the case
  • AU$1.2 billion to Whitehaven Coal.

ANZ are also advising GVK on project finance and are playing a lead role in arranging debt for the Indian conglomerate's massive 30 million tonne per year Alpha coal mine in the Galilee Basin.

Combined, these companies are proposing 46 new coal mining projects — either new mines or extensions to existing mines — that would have an annual output of about 340 million tonnes of coal per year, more than Australia as a whole currently produces.

Not all of these loans will have been for the express purpose of enabling specific coal projects, but some clearly are, such as the Whitehaven deal and the $1 billion loan to Peabody to assist with their Macarthur Coal takeover. Others will have been for a range of purposes, including helping these companies manage their ongoing debt.

Nonetheless, all of these loans enable the continuing operation of companies that are gleefully taking part in a coal expansion that will render a safe climate unattainable and ravage parts of the local environment along the way. Banks that purport to believe in sustainability and a healthy environment should on principle be running a mile from companies involved in such wanton destruction.

But ANZ have been lapping it up, more than happy to be financing liquefied natural gas projects on Curtis Island, also within the Great Barrier Reef World Heritage Area. ANZ was part of a $1.2 billion loan to Santos for their Gladstone LNG project and helped Origin Energy secure US$2.8 billion for their Australia Pacific LNG Joint Venture.

The other qualifying point worth making here is that ANZ, while clearly keen on a dirty deal, are by no means alone. Syndicates to these loans range from a few banks to dozens and from an Australian perspective, where ANZ is involved, Commonwealth, NAB or Westpac won't be far away. In fact, the latter three banded together with a host of other banks, including Macquarie, to set up a $1.25 billion loan to enable Adani's proposed coal export port at Abbot Point. ANZ deserves a grilling for bankrolling environmental destruction, but so do the others.

If you bank with the big four, this is your money financing environmental destruction. Customers, no less than citizens, have a huge role to play if we're going to protect Australia's environment from the rampant fossil fuel expansion underway.

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Sacha_Blumen
Posted Tuesday, January 22, 2013 - 18:16

So - would the global supply of fossil fuels be reduced if ANZ's loans to finance coal mines were withdrawn?

What's the point of this article - to say that banks finance coal mines? Or that they shouldn't for moral reasons?

Rob Shield
Posted Tuesday, January 22, 2013 - 22:50

rspsham
In reverse,
The point is, Sacha, to tell readers that the profits made by banks from the transactions made by readers are helping to fuel the destruction of the planet, so that readers can decide whether to seek another institution to manage their daily banking needs.

We'll have to see if pressure from customers makes a difference to institutions. It is easy to think that miners will find money elsewhere but, if it makes a difference to ANZ, then it should make a difference to other banks and I'm sure they'll think twice about lending - at least they'll lift their rates if the demand exceeds the reserves of those willing to supply. This would make miners think about maybe not mining as much - the desired outcome.
But there's only one way to know and that's to move your banking elsewhere and tell them why.
So will you follow me and move your cbanking to a "clean" institution?
Recommendations anyone?

joe_k
Posted Wednesday, January 23, 2013 - 08:41

I get the argument being made here, and see the merit in it. But surely there also needs to be some acknowledgment of the fact that ANZ is a corporation that operates in the capitalist economic system? In other words, its sole goal is to maximise profit. Should we be surprised when it does so? Unless it is profitable to not invest in these projects, why would they change?

I applaud the effort and ambition, and I am not wanting to be defeatist, but we are talking about $20 billion or so here. That would require an almost unfathomable amount of "personal banking" customers to change banks. Surely there are more realistic and pressing campaigns in the climate sector?

rowena
Posted Wednesday, January 23, 2013 - 10:49

How do you think taxation raises lots of money? Or toothpaste with a profit margin of 10c? It's the power of the masses.

If (for the sake of argument) 5 million customers have a savings account with Bank A, they only need an average balance of $4000 each to total $20 billion overall.

There is nothing unrealistic about the clout of consumers. But fortunately for the powers that be, our shopaholics are out of it. They no longer know their own strength.

This user is a New Matilda supporter. nulliusinverba
Posted Wednesday, January 23, 2013 - 20:25

Julien,

I love the idea but the strategy needs to be sharpened. I've been thinking about similar things recently.

On the level of banks, you have to pick a single bank as a target - ANZ is a great one. Yes, some pedants will try and say that's not fair to ANZ since other banks do the same thing. Consistency is nice and all, but the goal is to achieve real results that we urgently need - weigh those concerns against each other for two seconds... So, use their institutionalised greed to effect change: Another bank says, hey, sh!t, all this money's leaving ANZ because they bankroll economic and ecological suicide. We can still make very healthy profits whilst avoiding bankrolling economic and ecological suicide - and we can scoop up all these customers.

The problem is you need the numbers to flex that kind of power. A few hundred people who read this article and, in isolation, move their money - that may be a drop in the ocean to ANZ, they may hardly notice. The only way this kind of campaign can work is if enough people are organised to move their money at the same time, in a very publicised way - or credibly threaten to. An organisation like GetUp looks very well positioned to undertake such a campaign. If not GetUp, we need to build another power organisation to achieve this.

But just thinking about banks, I'm still bothered by the fact that the demand for coal is so great at this point that, somewhere, someone with the money and the short-sightedness will be all too eager to pounce upon the opportunity.

Which is why, perhaps, a broader project to turn us rabble consumers into a democratic force might be better. Think superannuation. Think hundreds of billions that an organisation like GetUp could probably organise. That may really have the chance to drive some institutional change...

Black Pepper
Posted Thursday, January 24, 2013 - 02:06

So, "The ANZ media release hoax has seen a sustained backlash against the bank itself". Oh yeah? Then please explain how the price of ANZ shares has risen virtually every day since the hoax.

Dreaming what you would like to see is one thing. Waking up to reality is quite another.

roma
Posted Thursday, January 24, 2013 - 15:22

Customer action towards ANZ certainly made a difference to their withdrawal of funding to Gunns.

This user is a New Matilda supporter. DrGideonPolya
Posted Sunday, February 3, 2013 - 11:51

Excellent article by Julien Vincent.

In a 2009 report entitled "Solving the climate dilemma: a budget approach" the WBGU, that advises the German Government on climate change, estimated that for a 75% chance of avoiding a 2C (2oC, 2 degree Centigrade, 2 degree Celsius) temperature rise (EU policy and majority global policy since the 2009 Copenhagen Climate Change Conference) the world can emit no more than 600 billion tonnes CO2 (carbon dioxide) (600 Gt CO2) between 2010 and zero emissions in 2050 (see WBGU, “Solving the climate dilemma: the budget approach”: http://eeac.hscglab.nl/files/D-WBGU_SolvingtheClimateDilemma_Dec09.pdf). Since CO2 is the most important greenhouse gas (GHG) we could roughly set the world’s terminal GHG pollution budget at 600 Gt CO2-e (CO2-equivalent, this term including other GHGs). Relative to commencement in 2010, how many years have we left before we exceed this terminal CO2 pollution budget of 600 Gt CO2-e?

In 2009 World Bank analysts used an estimate of a GWP of 72 for CH4 on a 20 year time frame to re-assess the contribution of livestock to man-made GHG pollution as over 32.564 Gt CO2-e/year of which 5.047 GT CO2-e/year is due to undercounted methane. This re-assessment lifts the annual GHG pollution from 41.744 Gt CO2-e to 63.803 Gt CO2-e. Assuming that live-stock-related GHG pollution increases in direct proportion ion to energy-related CO2 emissions, one can estimate that the world will reach 551.738 Gt CO2-e in 2017 and 624.363 Gt CO2-e in 2018 i.e. the World has 5.8 years at present rates before it exceeds the terminal CO2-e budget.

However one can re-assess the World Bank re-assessment by consider that CH4 has a GWP relative to CO2 of 105. This re-assessment indicates that the World will reach 573.167 Gt CO2-e in 2017 and 648.547 Gt CO2-e in 2018 i.e. the World has 5.3 years at present rates before it exceeds the terminal CO2-e budget. of 600 Gt CO2-e (see "Doha climate change inaction. Only 5 years left to act", 9 December 2012: http://mwcnews.net/focus/analysis/23373-gideonpolya-climate-change.html",; "Are we doomed?": https://sites.google.com/site/300orgsite/are-we-doomed ; and "2011 climate change course": https://sites.google.com/site/300orgsite/2011-climate-change-course ).

We have almost run out of time – at present rates of pollution the World will exceed its 600 Gt CO2-e terminal GHG pollution budget in only about 5 years. What can ordinary people do? Ordinary folk who care for their children grandchildren, Humanity and the Biosphere must (a) inform everyone they can and (b) urge and apply sanctions and boycotts against all people, politicians, countries and corporations complicit in the worsening climate genocide, noting that the worst annual per capita polluters the US, Canada and Australia have repeatedly sabotaged UN climate change conferences.

Decent Australians who care for their children and grandchildren must vote 1 Green. and boycott all those complicit in the worsening climate crisis and climate genocide.

Australian Domestic plus Exported greenhouse gas (GHG) pollution has already risen enormously under Labor and is expected to rise enormously under their carbon Tax-ETS strategy as shown by the following figures (in millions of tonnes of CO2-e per annum): 1,182 (2000), 1,512 (2009), 1,708 (2010), 2.572 (2020) (see "2011 climate change course": https://sites.google.com/site/300orgsite/2011-climate-change-course ) .

Tackling climate change means REDUCING greenhouse gas pollution and a basic, sensible electoral strategy is to punish the incompetent incumbent - sensiible people who care for their children, their grandchildren and the Living Planet will vote 1 Green and put Labor last until it decides to behave responsibly.

Climate criminal Australia must largely CEASE coal, gas, oil and iron ore exploitation ASAP.

Peace is the only way but Silence kills and Silence is complicity.

This user is a New Matilda supporter. Tokujiro
Posted Thursday, March 21, 2013 - 13:47

It seems inconceivable that people reading this social justice journal can care about/defend corporations making huge profits from socially and environmentally questionable activities - coal mining for starters. The people of Newcastle are literally up in arms about planned huge expansion to coal-loading facilities - and the rape and pillage of coal from the Upper Hunter/Liverpool Plains (have any of you seen what has been destroyed in that region over the past decade or so - let alone the political corruption of the OBEID/McDONALD/TORBAY shenanigans - another cancer to the heart of our comminity). As a child visiting grand-parents in genteel Hamilton (inner suburb of Newcastle) in the 1950s/1960s BHP days (daze?) I remember that windows need only be opened ten minutes and already a gloved hand rubbed along the sill would be turned black by the ever-present coal dust settling across the city (like the crap which falls nowadays over Hunters Hill as international flights come in to land at Mascot) - but the coal dust over Newcastle is back - as bad as it ever was - after a few years of clear skies and healthy fresh air. I do NOT understand the selfishness of Mr Sacha BLUMEN - and can only imagine that he has "investments". Let me declare that I do not. Apart from the health and success of all the students whom I have taught (that kind of investment - in education/learning) - that they may live long and uncorrupted by big-business and its apparent deceit in plundering our land for resources largely discredited in these 21st century times.

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i.vinos
Posted Wednesday, November 27, 2013 - 01:05

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