Adani’s Carmichael coalmine project will not be funded by Chinese banks, the Chinese embassy has said, in a move some see as dooming the project, and potentially Adani’s operations in Australia.
Bob Carr, the former New South Wales premier and former foreign minister, told the Guardian he had been lobbying Chinese businesses and government for three weeks before receiving confirmation from the Chinese embassy in Australia that no Chinese bank would be financing the controversial project.
Carr, who is also the director of the Australia China Relations Institute at the University of Technology Sydney, said the move could be the end for the Carmichael project, a view which was backed up by financial activists and analysts who have been working on the issue.
After all of Australia’s big banks ruled out funding Carmichael coalmine, which would be the biggest built in Australia, the Indian mining giant said it was “advanced” in its financing from international banks.
China was widely understood to be the source of that financing. In October it was revealed that two Australian ministers had written to the Chinese government, apparently at the request of Adani, to confirm that the project had met all its environmental approvals.
And in November it was revealed Adani was working with Chinese-state-owned enterprise China Machinery Engineering Corporation.
But since Saturday, three Chinese banks have ruled out financing the project, and overnight it was revealed the Chinese embassy had confirmed no Chinese bank would do so.
“It couldn’t have been more emphatic,” said Carr, who was enlisted to help with the lobbying by the Australian Conservation Foundation. He said he had received the confirmation from the embassy, and the ACF also reported being told the same. ACF said the embassy’s reason was “due to the absence of commercial feasibility”.
Carr said the banks and other institutions he had discussions with were “keenly interested and informed”.
“I underlined to them the controversial nature of the project,” Carr said, adding that he thought it could mean the end of Adani’s Carmichael coalmine.
Julien Vincent, from the financial activist group Market Forces, said Chinese funding was Adani’s “last credible hope”.
“And it’s gone,” Vincent said. “They’ve lost that chance. It’s essentially run out of credible options for funding.”
He said any other possible funding sources would be further threatened by the string of statements from the world’s biggest coal-funding banks, now including three in China, that have ruled out funding the project.
Vincent said without the Carmichael mine going ahead, refinancing for Adani’s Abbot Point coal terminal, due in the coming months, could also be in trouble, since it was not being fully utilised without coal from the proposed Carmichael mine.
A report by the Institute for Energy Economics and Financial Analysis revealed that Adani needed to refinance more than $2bn worth of loans for the coal terminal in the coming year – an amount that is more than it paid for the port in 2011.
