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Societe Generale to exit GVK Hancock’s $10-bn coal project

French bank Societe Generale has decided to suspend its involvement as an adviser in raising finance for GVK group’s Hancock coal project in Australia.

According to a statement on the bank’s official twitter account, “delay” in executing the project was the main reason for pulling out of it. It is learnt that there was extreme pressure by environmentalists regarding the project’s financing. GVK Hancock’s $10-billion Alpha coal project involves a thermal mine in the Galilee Basin, a 495-km standard gauge railway line and port facilities at Abbot Point. Pending all approvals, the first batch of coal from Alpha is scheduled for early 2016,  bound for the Asian export market.

Societe Generale tweeted that “in the context of the Alpha Coal project’s delay, Societe Generale has decided, in agreement with GVK Hancock, to suspend its mandate. The bank has therefore no involvement with the project.’’

Green groups see the announcement as a victory in their campaign to shame banks into refusing to fund the project.

However, GVK Hancock said, “GVK Hancock has been working with Societe Generale on a specific element of financing arrangements for our projects, but is not currently working on that specific work package and as such does not require their services at this time.”

“The key focus for our projects at this point in time is finalising our approvals and addressing litigious challenges to our attained approvals,” said Josh Euler, manager, corporate affairs, GVK Hancock Coal.

GVK had, in 2011, acquired 79% in Alpha Coal and Alpha West Coal Project and 100% in Kevin’s Corner Project, Queensland, from Hancock Coal. These projects hold an estimated 8 billion tonne and have a capacity of over 80 million tonne per annum.

“Once we have finalised approvals, we will execute coal offtake agreements and work to finalise financing arrangements,” Euler further said.

Source: The Financial Express