Deutsche bank rebuffs Adani’s funding request

The Deutsche Bank of Germany announced it will not lend money to the Indian mining firm Adani Group to finance the development of Abbot Point Terminal I. The decision came after an AGM held on Thrusday.

We stress that we take the future of the Great Barrier Reef very seriously. We observe that there is no consensus between UNESCO and the Australian government regarding the expansion of Abbot Point. Since our guidance requires such a consensus as a minimum, we would not consider a financing request. – Deutsche Bank Group

Deutsche Bank Group convenes AGM 2014 (Photo: Deutsche Bank Group FB)

Adani is one of the last remaining investors standing for the port terminal, along with another Indian firm, GVK Group.

Other investors have long abandoned their stakes, including mining giants Rio Tinto, BHP Billiton, Lend Lease and Anglo American. Market and financial analysts said the multi-billion dollar investment is unfeasible due to the end of the mining boom, with the downward spiraling of coal market prices worldwide. Galilee Basin in northern Queensland, where coal will be extracted,is also extremely remote and without basic infrastructure.

Tony Brown, tour operator for the Whitsundays, speaks at the bank’s AGM 2014 (Photo: Market Forces)

Australian mining goddess Gina Rinehart, herself, sold most of her coal assets in 2011. GVK bought them.

But despite Indian interests, the project has been stalled for two years. Adani is required to complete all environmental approvals and then raise AU $8 billion of additional debt and equity financing, and hence allow construction to commence on the Carmichael coal, rail and port proposal. Read the scale and magnitude of funding HERE.

There are speculations that the two companies tried to sell their equity holdings. GVK allegedly offered Coal India Ltd, but was rebuffed due to its uncommercial value. Adani is also rumoured to have approached several Chinese firms, including China Railway Corp.

Early this month, the Institute for Energy Economics and Financial Analysis (IEEFA) warned investors it is too risky to invest in the project. Local banks which were appointed to finance the project include National Australia Bank, Commonwealth Bank, and Westpac Banking Corp- on top of a few other international banks.

Tim Buckley , director of Energy Finance Studies, Australasia for the Institute for Energy Economics and Financial Analysis said that India cannot afford the price of imported coal:

India’s perilous economic and financial situation creates further uncertainty for companies relying on its ability and willingness to import coal, with its associated implications for inflation, current account deficits, economic instability and energy security’.

He also said that “imported coal would require double the current price of India’s wholesale electricity, which categorically discredits the nonsense argument that it might alleviate India’s energy poverty.” Buckley has produced detailed reports on Adani and GVK.

Whitsundays tour operator Tony Brown joins the rally in Germany (Photo: Market Forces)

Various environmental and civic groups have written the Deutsche Bank not to lend Adani.  Australian-base civic groups also linked with their European counterparts to “pressure” the bank. Some travel operators in Queensland further travelled to Germany to join the rally.

At the end of the AGM on Thrusday, the bank released the Deutsche Bank’s Environmental and Social Reputational Risk Framework (ES Framework), which stipulates the bank’s  environmental and social due diligence as an integral part of the approval process for doing business.

One of the specific guidelines recently adopted addresses activities in the close proximity to World Heritage Sites. It precludes transactions within or in close proximity to World Heritage Site unless there is a prior consensus between the relevant Government and UNESCO that such operations will not adversely affect the Outstanding Universal Value of the Site. This implies that we would not consider a request to finance an expansion unless we had the assurance of both the government and UNESCO that it would not adversely affect the Value of the Site.

Read: Deutsch Bank official stand and UNESCO’s State of Conservation

Blog Link: The Green Journal/ Asian Correspondent

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Greens rally to save Tasmania’s world heritage

The Bob Brown Foundation gathered around 2,000 people today to help rally against removal of 74,000 hectares of forests from the World Heritage List in the Upper Florentine Valley in Tasmania. The area is part of the 170,000 hectares added into the highly protected area which was decided in Phnom Penh, Cambodia last year .

Australia’s current Government proposed the removal as it intends to use the area for logging. The proposal has been submitted to the UNESCO’s World Heritage Committee and the decision will be announced around June 15-25 in Doha.

The Foundation said the area is largely intact with tall eucalyptus forests and karst region (underground cave formations) besides there are other significant geomorphological features and areas of significant Aboriginal heritage.

However, Prime Minister Tony Abbott reiterates his government’s mission, first and foremost, is to get back into business especially with the historic Free Trade Agreements (FTA) he recently signed with Japan and Korea, while FTA with China is also being worked out.

Noting his address to the 2014 Forest Works Dinner in Canberra last month, Prime Minister Tony Abbott  told the timber industry that his Government is working for the removal of the 74,000 hectares of forest from the heritage listing. He said,”One of the first acts of the incoming Government was to begin the process to try to get out of world heritage listing 74,000 hectares of country in Tasmania, because that 74,000 hectares is not pristine forest. It’s forest which has been logged, it’s forest which has been degraded, in some cases, it’s plantation timber that was actually planted to be logged.”

Abbott convinced timber investors that 74,000 hectares out of the world heritage listing will “still leave half of Tasmania protected forever.” He assured that his Government respects the timber industry and that it wants the timber industry to have a vigorous and dynamic future, “We want the timber industry to be a vital part of Australia’s economic future, not just something that was a relic of our history. That’s what this Government wants.”

The Bob Brown Foundation’s Campaign Manager Jenny Weber said, “Today’s outstanding turn out in the Upper Florentine forests clearly shows that Australians are very proud of their World Heritage forests. We are sending a strong message to UNESCO that we love our spectacular forests of outstanding universal value, and the Australian community will stand up to defend them.”
Rally speakers included Australian Greens Leader Senator Christine Milne, Markets for Change CEO Peg Putt, Still Wild Still Threatened’s Miranda Gibson and Home and Away actor Lisa Gormley.
Blog Link: The Green Journal at Asian Correspondent

 

 

Queensland slams UNESCO, defends gas on the barrier reef

UNESCO has released its damning environmental report on the Great Barrier Reef, but the Queensland State Government hits back saying the report poses an obstacle to the multi-billion dollar seam gas business.

The report came in time when the mineral boom is underway and the Queensland Government is excited about financial gains. Queensland Premier Campbell Newman said his Government understands the issues raised in the report but could not accommodate some of its chief recommendations, News Corp. reports.

Newman said his government is in coal business and he is not going to see the economic future of Queensland shut down.

UNESCO sent a team of experts in March to assess the status of the reef confronted by both natural and man-made threats. While natural threats could be beyond control, the impact of the latter can be minimised if the Queensland Government can review and adopt strategic solutions.

The international body said the World Heritage listed site is under enormous pressure amid increased developmental activities, including additional port infrastructures in and around the Great Barrier Reef and ongoing management of major liquefied natural gas (LNG) plants at Curtis Island and Gladstone Harbour.

The dredging in Gladstone Harbour for the seam gas has been blamed by local environmentalists for the area’s poor water quality and a skin disease affecting marine life. Green activists say dredging has adversely affected whales and dugongs in the area.

UNESCO recommended to the State Government to stop port facilities expansions and to undertake a comprehensive review and strategic solutions to protect the Outstanding Universal Value of the reef.

It warned the reef could officially be listed “in danger” if the federal Government fails to convince the international body it has improved its performance before February next year.

Whether Queensland would be able to help improve environmental conditions of the reef or not, both state and federal governments have already given mineral explorations a go. Federal Environment Minister Tony Burke supports the developmental projects saying the approval of applications has been in full swing. He said there was not much he could do to prevent development applications already in progress.

Mining magnates Clive Palmer and Gina Rinehart have likewise secured government’s approval of their mining ventures in Queensland. Further, the two mining lords have  been pressuring the Government to allow them to build the world’s largest coal export facility right in the heart of the Great Barrier Reef World Heritage Area. The facility is envisioned  to double Australia’s coal exports. The mining moguls expect to hear of Government’s decision in 36 weeks time, GetUp noted.

GetUp, an activist group, said mining billionaires are used to getting their way,” but they’re not the only ones who know how to fight.”  The group has forged a tie up with Greenpeace and BankTrack to undertake an advertising campaign in key financial market in Asia and India to warn potential investors not to invest in these projects.

It’s not just UNESCO who are against the massive expansion of coal and coal seam gas facilities. We’ve just released an opinion poll that found 79 per cent of  Australians are already concerned about the expansion of mining along the Reef’s recognised heritage area — and that was before UNESCO’s  scathing criticisms started to make headlines nationwide.

GetUp is optimistic the ad campaign will work.  It claims that  in 2009, it funded ads in the European Financial Times to discourage potential investors who were previously considering to fund Gunns’ pulp mill in Tasmania.

Blog Link: Asian Correspondent