(Reuters) – Australia's coal industry is suffering from declining access to finance and insurance, which are increasing the cost of doing business and threatening the longevity of an industry that accounts for the country's second most valuable exports, submitting to a parliamentary inquiry showed.
In submissions to the inquiry into the regulation of investment in Australia's export industry, said miners and contractors such as Adani Enterprises Ltd., New Hope Corp. and Whitehaven Coal Ltd., that impaired access to financial services unduly gave rise to business. risks and costs.
Global insurance companies, together with banks and other industries, have come under pressure from shareholders and climate activists to stop facilitating fossil fuel extraction projects.
Australia is still lagging behind in climate change commitments and has so far refused to commit to a zero ̵
The coal mines claimed that Australia's high energy coal offers a comparatively lower emission alternative to export markets compared to coal from other regions. They say coal also provides billions of dollars to the Treasury and supports regional jobs.
Support for coal was a key factor behind the Liberal-National Coalition's surprise election victory in 2019.
"Given the important role that exports play in Australia, Australian banks and other financial institutions are taking steps to limit and withdraw financial instruments for some of Australia's largest exporters, says Whitehaven. "If left unchecked, it could potentially cause much more damage to Australia's valuable export industry and economy."
to finance from other markets, said the Centennial Coal.
"In general, Asian offshore banks will only participate in an Australian-based syndicated financing agreement if Australian banks participate," it said. "Their view is that the Australian banks could Australian mining assets better than they would.If Australian banks do not participate, it is very unlikely that Asian banks will fill the void.
Australian banks provided about half of Centennial's debt facility in 2014, which only fell to 2% when they refinanced at the end of 2017. It is navigating refinancing again this year.
The withdrawal of global insurance companies risks making even any associated business unprofitable, says contractor BMD Contions Pty Ltd., which is building part of a 210 km railway line to serve Adani & # 39 ;s. The Carmichael mine in the state of northern Queensland, which will start operating this year.
BMD said that it had not been able to obtain liability insurance, environmental protection insurance or director and official insurance.
Either customers must address the risk or governments provide the necessary insurance from public funds to ensure that the export industry is supported, it said. now, because they need to offer payment to state governments to cover rehabilitation responsibilities, New Hope said. Catalog