French Bank Societe Generale will withdraw from its advisory mandate in raising finance for the joint India-Australian GVK-Hancock coal mine development in Queensland’s Galilee Basin.
The withdrawal comes just days after protestors staged rallies at the bank’s Paris and Pau branches.
Societe Generale issued an email explaining it would drop all involvement in the coal project.
“In the context of the Apha Coal project's delay, Société Générale has decided, in agreement with GVK-Hancock, to suspend its mandate. The bank has therefore no involvement with the project,” Societe Generale head of sustainable development, Jean-Michel Mépuis, said.
“These two AU$10 billionn plus Galilee coal proposals are commercially unviable and financially unbankable. Any project undertaken is highly likely to end up as a stranded asset as the rest of the world transitions to lower carbon solutions. Seaborne thermal coal has entered structural decline,” IEEFA director Tim Buckley said.
Buckley added: “At some point these highly geared Indian conglomerates will acknowledge there is no point sinking more good money after bad. The opportunities and needs emerging in the transformation of the domestic Indian power sector are enormous. Why pursue commercially unviable thermal coal export projects stranded in the middle of Australia?”
The French bank's decision is the latest twist for a project originally scheduled to produce coal from 2014, but which has suffered challenges from landowners and green groups, and been complicated by coal prices falling to more than five-year lows.
Developer GVK Hancock said that before seeking financing it is focused on finalising approvals for the project's Alpha coal mine in the Galilee Basin in Queensland, fighting legal disputes against approvals already won, and securing supply agreements.
"We have been working with Societe Generale on a specific element of the financing arrangements for our projects, but are not currently working on that specific work package and as such do not require their services at this time," GVK Hancock said in an emailed statement.
Edited from various sources by Sam Dodson
Read the article online at: https://www.worldcoal.com/coal/08122014/french-bank-withdraws-from-australian-coal-project-1656/