Deutsche Bank refuses to fund Adani’s coal project in Australia

The project can pose environmental threat to the fragile Great Barrier Reef, say conservation bodies like Unesco

 
By Anupam Chakravartty
Last Updated: Saturday 04 July 2015

Coal development in the Bowen Basin just east of the Galilee Basin. The area is under threat from coal mining and in particular the loss of the Bimblebox nature reserve--home to the endangered black-throated finch. Aerials show the existing coal developments contrasted with the natural beauty of the area (Courtesy ©Greenpeace/Tom Jefferson)

With the Deutsche Bank refusing to fund the expansion of one of the world's biggest coal ports near Great Barrier Reef in Australia, Adani’s plan to import coal from the country has hit a roadblock. Germany’s largest bank has refused to fund the project following pressure from green activists and conservation bodies including Unesco.

According to Greenpeace, 180,000 Germans signed a petition against expansion of the port facilities at Abbot Point project, near Bowen, in Queensland province in North Australia. The activists have said that the expansion poses environmental threat to the Great Barrier Reef, a fragile ecosystem comprising coral reefs and endangered marine species. The project was approved by the Australian government last year subject to strict environmental conditions.

Deutsche Bank officials, last Thursday, had said the decision to not fund these projects has a lot to do with the differences between Unesco and Australian government over expansion of the port facility. It has been estimated that during expansion, three million cubic metres of dredged sand would be deposited close to the world heritage site. This would be done to help ship coal from mines in Galilee River basin in Queensland. While environmentalists have cited possible losses to the Reef, questions have been raised about the commercial viability of mining coal from Galilee and supplying it for power projects in India. If the project comes through, Abbott Point, a port owned by Adani, will be the world’s largest port for shipping coal.

Read: Green signal for Adanis' mega coal mine project in Queensland

Why banks are reluctant to invest

Last week, on May 22, Deutsche Bank in an annual general meeting, announced that it would not consider investing in the project. According to ABC News, co-chief executive officer Juergen Fitschen told the shareholders in the meeting in Frankfurt that the Bank’s policy requires a consensus between Unesco and the government. “We, therefore, would not consider applications for the financing of an expansion any further,” said Fitschen. Last year, the bank, along with Australian banks, Commonwealth and Westpac, helped Adani Group by funding US $ 1.25 billion loan to buy a 99-year lease on the Abbot Point terminal from the Queensland government in 2011. The bank, since then, is being slammed by environmental activists from Australia and international bodies like Greenpeace for funding the port project expansion.

Following Deutsche Bank’s decision that was announced last week, even HSBC bank, billed as Europe’s largest bank, decided to stay away from the port expansion. “Abbot Point is crucial to the export of coal from proposed mega mines in Queenland’s Galilee Basin. Dredging and dumping of large quantities of sand in the Reef’s waters will threaten dugongs, turtles and coral reefs,” said Felicity Wishart, of the Australian Marine Conservation Society.

Unhappy Australian government

The Australian government has said that all the concerns about the reef would be addressed in a communication to Unesco. Queensland administration has said that stopping the projects would mean stalling projects worth US $ 26 billion in the Galillee basin. Earlier this month, Unesco had recommended that the Great Barrier Reef should be termed as a World Heritage in Danger site.  On June 15, World Heritage Council is supposed to take a crucial decision on the status of threats to Great Barrier Reef. GVK, an Indian infrastructure company, which owns mines along with Adani, has said the commencement of work on the mines would depend on discussions in the meeting. It, however, hoped that the stand-off between Australian government and Unesco ended soon.

 

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