Adani's Queensland coal project gets more iffy as China's top banks deny funding
04 December 2017
China's two biggest banks said they do not plan to finance a controversial Australian coal mine, in the latest blow to Indian conglomerate Adani Enterprises Ltd's long delayed project.
Industrial and Commercial Bank of China (ICBC) and China Construction Bank said in separate statements they were not working on the project, after media recently reported that Chinese banks may get involved.
The future of a controversial Queensland mega-mine has thus suffered another setback, with project funding from China looking increasingly unlikely.
Adani is seeking A$2 billion ($1.5 billion) in financing by March 2018 for the A$4 billion first stage of its proposed Carmichael coal mine, a project that has been shrunk from a A$16.5 billion plan to make it more viable.
Adani today declined to comment on its financing plans or the statements from the Chinese banks.
Australia's Greens have heralded the end of the project after the Chinese banks ruled out providing any funding for the Adani Carmichael coal mine in the Galilee Basin.
"Any financier with any sense doesn't want Adani," Greens senator Andrew Bartlett told reporters in Canberra today. "It's time for Adani to give it up, save their money and for the politicians of Queensland to focus on the issues that will deliver genuine jobs for regional Queensland."
Australian and overseas banks have balked at granting loans for the project, which environmentalists oppose due to climate change and the potential for damage to the Great Barrier Reef.
''ICBC has not been, and does not intend to be, engaged in arranging financing for this project,'' ICBC, China's biggest listed lender by assets, said in a statement on its Australian website. ''ICBC attaches great importance to its social responsibilities and keenly promotes 'green financing' ... this statement is made without any view on or prejudice towards the Carmichael mine project.''
The mine's location 400km from a Pacific Ocean shipping terminal means financing infrastructure costs has been at the forefront of debate over the project's economic viability.
''China Construction Bank is not involved with, nor considering involvement with, the Adani Carmichael Mine project,'' an external spokesperson for China Construction Bank in Australia said in an emailed statement today. CCB in China was not immediately available for comment.
Reuters has previously reported that Adani was in talks with China Machinery Engineering Corp (CMEC) for a loan, which could have involved China Construction Bank or China Export Import Bank. China Export Import Bank was not immediately available for comment.
Carmichael has been delayed by court challenges from environmentalists and indigenous groups concerned about climate change and the impact on native land and water supply, but those challenges have been rejected.
Australia's own big four banks have ruled out supporting the project. The Queensland Labour government promised to veto a federal government loan to the project during the recent state election.
Yet Nationals senator Bridget McKenzie said the Adani mine was still an "incredible project" that would be an important source of jobs for regional Queensland.
"I hope that private investment can be found to ensure that project does come to fruition," Senator McKenzie said.
The senator campaigned in Rockhampton and Keppel during Queensland's state election.
"On the ground, if you spoke to the young voters, if you spoke to the workers, they wanted to see this project go ahead because they knew it meant local jobs in that north Queensland area."
An Adani spokesman did not immediately respond to requests for comment.
Adani hopes to start shipping coal from Carmichael by March 2020 in the first stage of the project, which it bought amid a coal boom in 2010.