China’s Top Banks Distance Themselves From Adani Coal Mine Project in Australia

The Adani group’s Australian coal mine project, a long-delayed plan by the Indian conglomerate, has suffered yet another setback as two of the biggest banks of China have backed out from financing it. Dispelling reports of their involvement in funding the venture, China Industrial and Commercial Bank of China (ICBC) and China Construction Bank (CCB) released separate statements saying they are not working on the project.

Adani is seeking A$2 billion to finance the A$4 billion first stage of the Carmichael coal mine project in Queensland state by March 2018. The project has been opposed by environmentalists, who have cited concerns for climate change and potential damage to the Great Barrier Reef. The challenges concerning adverse effects on the climate and impact on native land and water supply have earlier been rejected in court.

“ICBC has not been, and does not intend to be, engaged in arranging financing for this project,” the bank said in a statement on its Australian website. “ICBC attaches great importance to its social responsibilities and keenly promotes ‘green financing’. This statement is made without any view on or prejudice towards the Carmichael mine project.” ICBC is China’s biggest listed lender by assets.

“China Construction Bank is not involved with, nor considering involvement with, the Adani Carmichael Mine project,” an external spokesperson for China Construction Bank in Australia said in a statement on Dec. 4.

Australian and overseas banks have also shied away from granting loans for the project.

Adani was in talks with China Machinery Engineering Corp (CMEC) for a loan that could have involved China Construction Bank or China Export Import Bank, according to Reuters. Adani’s project aims to start shipping coal by March 2020 in the first stage.

“Any financier with any sense doesn’t want Adani,” said senator Andrew Bartlett from Australian Greens party, the Sydney Morning Herald reported. “It’s time for Adani to give it up, save their money and for the politicians of Queensland to focus on the issues that will deliver genuine jobs for regional Queensland,” he said in Canberra on Dec. 4.

National senator Bridget McKenzie, however, says Adani’s mine project would be an important source of jobs in Queensland. The Queensland Labor government promised to veto a federal government loan to the project during the recent state election.

The mine, located 400 km from a Pacific Ocean shipping terminal, has been at the forefront of debate over the project’s economic viability as its location means infrastructure costs.

Adani group declined to comment on its financing plans or the statements from the Chinese banks on Dec. 4, Reuters reported.