Deutsche Bank rules out funding for controversial Abbot Point coal terminal

Updated

One of the world's leading investment banks is refusing to consider funding the expansion of a Queensland coal terminal which would become the world's largest coal port.

At its annual general meeting in Frankfurt overnight Deutsche Bank announced that it would not consider investing in the Abbot Point project, near Bowen, in Queensland's north.

Last year the company helped refinance the lease on the existing 30-year-old terminal.

In a statement, the company said there was speculation that it was the "most likely" bank to fund the expansion.

However, it said it would not finance an expansion without the assurance of both the Government and UNESCO that it would not damage the Great Barrier Reef.

"We observe that there is no consensus between UNESCO and the Australian Government regarding the expansion of Abbot Point," it said.

"Since our guidance requires such a consensus as a minimum, we would not consider a financing request."

Earlier this month world heritage body UNESCO condemned the Federal Government's approval to dispose of 3 million cubic metres of dredge spoil in the Great Barrier Reef Marine Park area as part of the expansion.

UNESCO has recommended that the World Heritage Committee consider adding the reef to the World Heritage in Danger list in 2015, unless the Government further protects the reef.

'Financial institutions standing up for the reef'

Whitsunday tourism operator Tony Brown flew to Europe to attend the AGM and question the bank's board.

"People are listening and people honestly care, not just in Australia and the population there, but we have these financial institutions that are standing up for the future for the Barrier Reef," he said.

"Look, here we are - here's an operator from Airlie Beach who's travelling through Europe and getting in with these huge banks and getting hearings and speaking to these people and getting these great responses."

The head of law firm Baker & McKenzie's Global Environmental Markets practice, Martijn Wilder, said the decision was a sign of the times.

"I don't think it has come as a surprise ... given we've seen a growing trend or pressure put on financial institutions in regard to approving developments or investments that have a climate or environmental impact," he said.

"We've seen this historically in the case of what happened with ANZ and the pulp mill in Tasmania, we're seeing it with pressure being put on investors in the Keystone pipeline in the US.

"As a result of that I think a lot of investors are being put under a lot of pressure."

Abbot Point approval misses the point What point is an environmental assessment if it ignores one of the most pressing issues, asks Sara Phillips. What point is an environmental assessment if it ignores one of the most pressing issues, asks Sara Phillips.

In March, Queensland's Deputy Premier Jeff Seeney said he remained confident about the future of the north Queensland port, despite several companies pulling out of the tender process.

Mining company Anglo American withdrew its bid, following Lend Lease, which let its partnership with Aurizon lapse last month.

Miners GVK Hancock and Adani are pushing ahead with their plans to build terminals at the port.

"This doesn't impact our proposed projects in any way," GVK said in a statement.

"The expansion of the existing Abbot Point port will not impact the outstanding universal value of the Great Barrier Reef."

Queensland Resources Council Chief Executive Michael Roche said it does not appear Deutsche Bank had any involvement with the planned expansion.

"Nevertheless, their requirement of an assurance from both the Australian Government and UNESCO about protecting the outstanding universal value of the Great Barrier Reef can be readily met," he said.

The Abbot Point expansion is vital for the development of the Galilee Basin, home to substantial coal reserves.

Earlier this month the Queensland Government signed off on a $16 billion coal development in the basin that could become the largest coalmine in Australia.

The Carmichael Coal Mine, north-west of Clermont, will produce up to 60 million tonnes of coal each year and includes a 189 kilometre rail line.

The project, which is being run by Adani Mining, a wholly owned subsidiary of India's Adani Group, now goes to the Federal Government for final approval.

But analysts have predicted that Adani might delay or even drop the Carmichael project because of a collapse in the international coal price and high levels of debt at its Australian subsidiary.

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Topics: environment, coal, industry, business-economics-and-finance, bowen-4805, qld

First posted