Coal news and updates

Coal to stay in doldrums, says RBA

The global divestment push appears to have had a negligible effect on Australia's big four banks, with ANZ leading the charge in lending $12.6 billion to the local fossil fuels sector since 2008, according to a new report.

The big four have proved elusive targets for the divestment movement, with activist group Market Forces issuing a report on Thursday showing the banks have lent about a quarter, or $36.7 billion, of debt finance to the industry in Australia – coal, oil and gas – since 2008.

It came as the RBA on Thursday said depressed thermal coal prices were expected to stay for at least another two years, saying the Australian industry is running out of ways to keep cutting costs to stay abreast of the falling price. The RBA said that a shift to cleaner energy sources in some countries, and excess supply in thermal coal would continue to weigh on prices, in a June quarter update on the industry.

Thermal coal spot prices have crashed by about 50 per cent since 2011, to languish at about $US60 a tonne.

Of its fossil fuel targets, thermal coal has proved the most successful for the divestment movement, which aims to force a wedge between the sector and its debt and equity investors.

Australia has been the biggest lender to the local fossil fuels industry since 2008, followed by Japan, China, the United States, France and Britain. The big four accounted for 42 per cent, or $6.8 billion, of deals in 2014 – the highest level in the six years covered by the report, due in large part to ANZ, which recorded its biggest year yet.

Notably, lending by the other three big banks to the sector declined last year against 2013, and Westpac trails by a distance. 

The divestment movement has had a string of high-profile wins in the past year, as it becomes more organised, mainstream and sophisticated. But the big four eludes them.

"In times when foreign bank support for fossil fuels is at its lowest, the role of the big four banks is of greatest importance," the report said

Whitehaven Coal – a favourite target of environmental and divestment activists – three months ago struck a $US1.4 billion ($1.8 billion) refinancing deal with Australia's big four banks.

The "vast majority" of fossil fuel projects in Australia rely on our big four banks to get off the ground and keep operating.

Market Forces says the big four "remain among the leading contenders to provide debt" to Indian conglomerate Adani for its planned $16.5 million mega mine in Queensland's Galilee Basin.

Campaigners are targeting customers at the big four, convincing about 3000 people to close their accounts in the past 18 months or so, and move at least $400 million worth of loans and deposits to banks that don't lend to fossil fuels. And, at least 2000 customers have put their banks on notice.

source: http://www.smh.com.au