A “cautiously-couched, incremental” investment decision by Sydney, Australia-based Westpac Banking Corporation has set off alarm bells for Gujarat-based Adani Group, which now finds itself scrambling for capital for the new coal mine it wants to build in Australia.
“The angry denunciation of Westpac’s new climate policy—which rules out funding for new mines in the Galilee Basin—serves only to underscore how crucial support from at least one major Australian bank was to Adani’s push to win finance for its beleaguered Carmichael coal project,” EndCoal.org reports. “Now shunned by all of Australia’s big banks—the Commonwealth Bank, NAB, ANZ and now Westpac—as well as a further 15 banks around the world, Adani is desperate and financially dateless.”
The policy commits Westpac to “limit lending to any new thermal coal mines or projects (including those of existing customers) to only existing coal-producing basins, and where the calorific value for that mine ranks in at least the top 15% globally.”
In a release that curiously, as EndCoal.org points out, didn’t appear on the company website Adani claims the Australian financial institutions have “chosen to bow to environmental activists” and opted to “ignore the opportunity to invest” in the project. It claimed the banks would still invest in overseas coal projects “at the expense of Australians, many of whom are their investors and depositors.”
The company’s overheated response notwithstanding, “Westpac’s policy is a cautiously-couched, incremental improvement on its previous policy, but far from being ‘anti-coal’, as the headline on one Fairfax Media article tagged it,” EndCoal.org’s Bob Burton states.
“Indeed, aside from the huge climate considerations, there are good financial reasons why a bank like Westpac wouldn’t risk backing any Galilee Basin project: the mines would produce low-quality coal and require huge investments in new railway and port capacity at a time the future price of thermal coal appears to be bleak.”
The Australian Youth Climate Coalition declared victory in a three-year campaign to put pressure on the country’s second-biggest bank and fourth-largest company.
“We had tens of thousands of conversations with customers, and delivered the message to Westpac. We filled their AGMs with questions about climate change, respecting Indigenous rights, and their fossil fuel investments, and held actions outside,” organizer Kelly Mackenzie recounts, in an illustrated online account of the campaign.
“When Westpac refused to budge, we turned our sights to the other big banks to create the space for Westpac to move. Replicating the above tactics, we were successful in getting NAB to rule out involvement, and CommBank and ANZ to publicly distance themselves from Adani’s coal projects.”
The group held a sustained series of conversations with employees at Westpac headquarters. And at a crucial point in the campaign, as Adani got its financing package together and the national government put a $1-billion subsidy on the table, “we knew it was time to ramp up pressure again on Westpac. Volunteers ‘adopted’ 150 bank branches and visited them every week.”
Stopping the subsidy will be AYCC’s next focus, Mackenzie notes. “We are very concerned about the promises [Prime Minister Malcolm] Turnbull is making to use this fund to open the Galilee Basin and build gas pipelines.”