Extract from The Guardian
President of Kiribati calls for immediate worldwide moratorium on new coalmines and expansions ahead of Paris climate talks
A major global insurer has warned of the “grave reputational risks” of bankrolling Adani’s huge Queensland coal project, as the vulnerable island nation of Kiribati has begun a diplomatic campaign to halt new coalmines worldwide.
The investment arm of UK-based Aviva, which manages assets worth $522bn, is the latest international financier to flag concerns over the Carmichael coalmine, which it said could become a “stranded asset” and was “the antithesis of what was needed” ahead of key UN climate talks in Paris in December.
Aviva Investors’ head of responsible investment engagement, Abigail Herron, said the asset manager had recently “sought assurances” from Standard Chartered, the UK bank which subsequently withdrew from its advisory role to Adani over the project.
“The reputational risks inherent in the Carmichael project are grave and many of the major financiers rightly recognise this and have stepped away from the project,” Herron said.
Anote Tong, the president of Kiribati, which faces acute climate risks through rising seas, has written to state leaders calling for an immediate worldwide moratorium on new coalmines and expansions ahead of the Paris climate talks.
“Kiribati, as a nation faced with a very uncertain future, is calling for a global moratorium on new coalmines,” Tong wrote in a letter to other national leaders.
“It would be one positive step towards our collective global action against climate change and it is my sincere hope that you and your people would add your positive support in this endeavour.
Tong wrote that stopping new coalmines would make any agreement in Paris “truly historical”, while the “construction of each new coalmine undermines the spirit and intent of any agreement we may reach”.
“As leaders, we have a moral obligation to ensure that the future of our children, our grandchildren and their children is safe and secure. For their sake, I urge you to support this call for a moratorium on new coalmines and coalmine expansions.”
Both the Australian and Queensland state governments publicly support the Carmichael coal project, which would generate carbon emissions equivalent to 1.3 times Australia’s total annual output from burned coal.
The federal court last week overturned approval of Adani’s mining licence by the environment minister, Greg Hunt, who could not show he fully took into account advice on vulnerable snake and skink species impacted by the mine.
This prompted an attack on Wednesday from trade minister Andrew Robb on conservationists he said were using “a skink” for “a patsy” in obstructionist legal challenges that were undermining trade talks with India.
Conservation groups responded on Thursday by announcing a major newspaper advertising campaign targeting Hunt over his handling of the mine.
The ads, which will appear on Friday, will pose the question: “Is Greg Hunt the minister for the environment, or the minister against the environment?”
Australian Conservation Foundation president Geoff Cousins said Hunt’s renewed deliberations on Adani’s application under the Environmental Protection and Biodiversity Conservation Act would be “a major test for [him] as minister for the environment”.
“Adani’s Carmichael mine would be the biggest coalmine in Australia,” Cousins said.
“If it goes ahead it will destroy wildlife habitat, damage scarce outback groundwater and contribute to the world’s climate problem when the coal is burned.”
Aviva’s Herron said if the project goes ahead, it “could have significant negative local and global environmental and human rights impacts”.
“The Carmichael project also has the potential to become a stranded asset and is the antithesis of what is needed as policymakers gear up to negotiating a credible longterm greenhouse gas reduction at the upcoming negotiations in Paris,” she said.
“We have recently spoken with Standard Chartered to seek assurances about their involvement in the project and take great comfort from the announcement that they will be withdrawing from their advisory role with Adani.”
She said this was in line with the bank’s policy against financing clients who “have impact upon and operations located within Unesco world heritage sites”.
The coal project’s impact on the world heritage-listed Great Barrier Reef – through port expansion, increased shipping and climate impact through emissions from coal – was “a very pertinent issue to us”, Herron said.
Standard Chartered announced on Monday it was withdrawing from the project, with an Adani spokesman later saying the bank had done so at the company’s direction.
It followed Commonwealth Bank last week also confirming it would end its advisory role over the project, which Adani again said was initiated by the miner.
Greenpeace climate and energy campaigner Nikola Casule said Aviva’s warning was “yet another sign of how unviable this destructive coal project has become”.
“With climate change being a real concern for financial institutions worldwide, more and more investors are now seeing this mega coalmine for what it really is: a threat to the climate and the Great Barrier Reef,” he said.
“With banks walking away and investors clearly voicing their concerns, the Australian federal government must not provide any taxpayer subsidy or support to prop up this controversial project.”
There has been speculation that aborted Queensland government funding for Adani’s mine infrastructure could be replaced by the federal government’s new proposed development fund for northern Australia.
Further comment was sought from Adani, which has previously stated that it initiated the end to the advisory roles of both banks as it focused on obtaining government approvals which it claimed had delayed the project.
Adani has put virtually all other work towards the mine on hold, axing its engineering contractors, project management teams and reportedly putting its inhouse engineers on notice.
An Adani spokesman said the company “together with local businesses in the communities in which we live and work, and trusted suppliers, is committed to delivering jobs and economic benefits in Queensland”.
“Together with other miners and our industry body, we’ll continue to make clear the destructive impact on local communities of politically motivated activists seeking to deny these jobs and economic benefits through their endless use of legal loopholes,” he said.
Adani’s own modelling, as revealed in a separate Queensland land court challenge, suggests the project is viable at a Newcastle benchmark thermal coal price of $80-$100, according to energy analyst Tim Buckley. That price currently sits at around $60.
The separate steep fall in world prices for coking coal forced New Zealand’s largest coalminer, Solid Energy, into bankruptcy, it was also reported on Thursday.
The investment arm of UK-based Aviva, which manages assets worth $522bn, is the latest international financier to flag concerns over the Carmichael coalmine, which it said could become a “stranded asset” and was “the antithesis of what was needed” ahead of key UN climate talks in Paris in December.
Aviva Investors’ head of responsible investment engagement, Abigail Herron, said the asset manager had recently “sought assurances” from Standard Chartered, the UK bank which subsequently withdrew from its advisory role to Adani over the project.
“The reputational risks inherent in the Carmichael project are grave and many of the major financiers rightly recognise this and have stepped away from the project,” Herron said.
Anote Tong, the president of Kiribati, which faces acute climate risks through rising seas, has written to state leaders calling for an immediate worldwide moratorium on new coalmines and expansions ahead of the Paris climate talks.
“Kiribati, as a nation faced with a very uncertain future, is calling for a global moratorium on new coalmines,” Tong wrote in a letter to other national leaders.
“It would be one positive step towards our collective global action against climate change and it is my sincere hope that you and your people would add your positive support in this endeavour.
Tong wrote that stopping new coalmines would make any agreement in Paris “truly historical”, while the “construction of each new coalmine undermines the spirit and intent of any agreement we may reach”.
“As leaders, we have a moral obligation to ensure that the future of our children, our grandchildren and their children is safe and secure. For their sake, I urge you to support this call for a moratorium on new coalmines and coalmine expansions.”
Both the Australian and Queensland state governments publicly support the Carmichael coal project, which would generate carbon emissions equivalent to 1.3 times Australia’s total annual output from burned coal.
The federal court last week overturned approval of Adani’s mining licence by the environment minister, Greg Hunt, who could not show he fully took into account advice on vulnerable snake and skink species impacted by the mine.
This prompted an attack on Wednesday from trade minister Andrew Robb on conservationists he said were using “a skink” for “a patsy” in obstructionist legal challenges that were undermining trade talks with India.
Conservation groups responded on Thursday by announcing a major newspaper advertising campaign targeting Hunt over his handling of the mine.
The ads, which will appear on Friday, will pose the question: “Is Greg Hunt the minister for the environment, or the minister against the environment?”
Australian Conservation Foundation president Geoff Cousins said Hunt’s renewed deliberations on Adani’s application under the Environmental Protection and Biodiversity Conservation Act would be “a major test for [him] as minister for the environment”.
“Adani’s Carmichael mine would be the biggest coalmine in Australia,” Cousins said.
“If it goes ahead it will destroy wildlife habitat, damage scarce outback groundwater and contribute to the world’s climate problem when the coal is burned.”
Aviva’s Herron said if the project goes ahead, it “could have significant negative local and global environmental and human rights impacts”.
“The Carmichael project also has the potential to become a stranded asset and is the antithesis of what is needed as policymakers gear up to negotiating a credible longterm greenhouse gas reduction at the upcoming negotiations in Paris,” she said.
“We have recently spoken with Standard Chartered to seek assurances about their involvement in the project and take great comfort from the announcement that they will be withdrawing from their advisory role with Adani.”
She said this was in line with the bank’s policy against financing clients who “have impact upon and operations located within Unesco world heritage sites”.
The coal project’s impact on the world heritage-listed Great Barrier Reef – through port expansion, increased shipping and climate impact through emissions from coal – was “a very pertinent issue to us”, Herron said.
Standard Chartered announced on Monday it was withdrawing from the project, with an Adani spokesman later saying the bank had done so at the company’s direction.
It followed Commonwealth Bank last week also confirming it would end its advisory role over the project, which Adani again said was initiated by the miner.
Greenpeace climate and energy campaigner Nikola Casule said Aviva’s warning was “yet another sign of how unviable this destructive coal project has become”.
“With climate change being a real concern for financial institutions worldwide, more and more investors are now seeing this mega coalmine for what it really is: a threat to the climate and the Great Barrier Reef,” he said.
“With banks walking away and investors clearly voicing their concerns, the Australian federal government must not provide any taxpayer subsidy or support to prop up this controversial project.”
There has been speculation that aborted Queensland government funding for Adani’s mine infrastructure could be replaced by the federal government’s new proposed development fund for northern Australia.
Further comment was sought from Adani, which has previously stated that it initiated the end to the advisory roles of both banks as it focused on obtaining government approvals which it claimed had delayed the project.
Adani has put virtually all other work towards the mine on hold, axing its engineering contractors, project management teams and reportedly putting its inhouse engineers on notice.
An Adani spokesman said the company “together with local businesses in the communities in which we live and work, and trusted suppliers, is committed to delivering jobs and economic benefits in Queensland”.
“Together with other miners and our industry body, we’ll continue to make clear the destructive impact on local communities of politically motivated activists seeking to deny these jobs and economic benefits through their endless use of legal loopholes,” he said.
Adani’s own modelling, as revealed in a separate Queensland land court challenge, suggests the project is viable at a Newcastle benchmark thermal coal price of $80-$100, according to energy analyst Tim Buckley. That price currently sits at around $60.
The separate steep fall in world prices for coking coal forced New Zealand’s largest coalminer, Solid Energy, into bankruptcy, it was also reported on Thursday.
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