The Commonwealth Bank has revealed its involvement with Indian company Adani’s planned Galilee Basin coal mine has ended in the wake of the project having its federal environmental approval rescinded by the courts.
The Carmichael mine would be the largest in Australia’s history, and environmental groups have waged a relentless campaign calling on banks to publicly rule out financing the $16.5 billion project.
Pressure had been building on the Commonwealth Bank for the past year with thousands of people taking protest actions at hundreds of branches across the country.
The bank’s withdrawal from the project follows announcements from 11 banks that they would not be involved in financing the planned mine.
But Adani denies it was the Commonwealth Bank which ended the relationship, instead claiming it terminated its mandate with the bank “on the basis of its own concerns over ongoing delays to a now five year long approvals process here in Australia”.
A spokesperson said Adani would happily work with the bank in the future, provided “the Commonwealth [government]approvals framework is not further undermined by activists seeking to exploit legal loopholes”.
Yesterday the Federal Court rescinded the Carmichael mine’s Commonwealth approval because the Environment Minister Greg Hunt failed to consider conservation advice relating to the project’s impact on two nationally listed species.
The mine is currently without any approvals for its environmental plans after a series of court challenges and targeted public campaigns with Adani admitting “it’s necessary our timelines and budget reflect those changes”.
Embattled on all fronts, the dislocation from the Commonwealth Bank appears to be a serious blow.
“As an adviser, Commonwealth Bank was in line to be a leading lender to Adani’s Carmichael mega coal mine,” said Julien Vincent, Lead Campaigner with Market Forces.
“Adani has not just lost hundreds of millions of dollars in debt finance that CBA could have brought, but the credibility that a major Australian institution brought to the project too,” he said.
According to Vincent, “It’s an embarrassing blow and could cost this project billions of dollars”.
Adani had been hoping to secure financial closure by the end of this year, a prospect that is looking increasingly remote.
The public distance between Adani and CommBank follows announcements from Barclays, Morgan Stanley, Credit Suiss, Deutsch Bank, HSBC, Société Générale, Crédit Agricole and BNP Paribas, ruling out their financial backing.
The Carmichael mine has courted controversy in part because it would likely help open the Galilee Basin coal reserves for some of the eight other coal mines proposed in the region by financing a vital rail link.
Adani’s would be the nation’s largest ever coal mine, with an extraction of 60 million tonnes per annum for more than half a century. Collectively, the proposed Galilee mines would release more carbon emissions than entire nations like the United Kingdom, South Africa, and Italy.
The coal would be shipped through the World Heritage listed Great Barrier Reef, from what would be the largest coal export terminal in the world if Adani’s Abbot Point Port is developed as planned.
“CommBank has made the right decision for the climate, the reef and the community by ruling out involvement with Adani’s dangerous coal mine that would be exported through the Great Barrier Reef,” said Kirsty Albion, National Director of the Australian Youth Climate Coalition.
Climate and Energy Campaigner at Greenpeace Australia Pacific, Nikola Casule, said that “millions of people across 193 countries have taken action to protect the Great Barrier Reef from coal because it’s a global treasure”.
“It is now time for other banks in Australia and around the world to follow their lead and rule out any involvement in this environmentally disastrous, financially unviable coal project,” Casule said.
Groups like 350.org, the Australian Conservation Foundation, and the Australian Youth Climate Coalition have run a targeted campaign, lobbying potential investors, banks, and urging the public to divest their funds from institutions that would support the development of the Galilee coal fields.
Earlier this year the Queensland Land Court heard evidence that, in light of what could be a structural decline in the coal price which has plunged by 60 per cent in the past five years, the Carmichael mine is simply not economically viable.
But the Queensland Minerals Council yesterday hit out at activist groups and blamed the industry’s increasingly poor fortunes on their campaigns. According to the Department of Environment, the question of whether the Carmichael mine will have its approval reinstated will be resolved within two months, but the prospect of further legal action looms large.
Queensland Minerals Council Chief Executive Officer Michael Roche responded by calling on “governments to step up and close the loopholes that enable these actions and the resulting negative impacts on our industry”.
“For as long as these loopholes exist, highly motivated and well-funded activists will exploit them,” Roche said.
“Foreign investors do not have limitless patience as their projects are mired in a seemingly unending process of legal challenge.”
In a statement released yesterday, Adani greeted the Court’s decision with a similar line. “Adani will await the Minister and his Department’s timely reconsideration of its approval application,” a company spokesperson said.
Despite being plagued by opposition, Adani maintains it “is confident the conditions imposed on the existing approval are robust and appropriate once the technicality is addressed”.
The company has been laying off contractors over recent months as the struggle to secure approvals and finance for the Carmichael mine drags on, but the project has always enjoyed a high level of political support which is likely to continue.
However, the sources of controversy have ballooned with time, with Adani’s poor track record of environmental breaches in India and contribution to climate change also featuring as lines of argument in the Federal Court case.
Gross exaggerations in relation to job figures, corporate tax, and royalties Adani claimed the project would fetch were exposed in the Queensland Land Court earlier this year.
“You can’t trust this organisation and therefore you can’t trust what they’re saying about yesterday’s Federal Court decision being a technicality,” said Kelly O’Shannasy, Chief Executive Officer at the Australian Conservation Foundation.
The Chief Executive Officer at climate advocacy group 350.org, Blair Palese, said that “with 12 banks now out of the game, the approvals rejected by the courts and major public opposition at a global scale, there’s no way that Adani can get this project off the ground”.
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