Insurance providers shun coal industry
AUSTRALIAN coal producers may be forced to self-insure as major providers shun the industry over escalating climate concerns, while the exit of several big four banks will cause international financiers to quit lending to the sector, Whitehaven Coal said.
Whitehaven, which operates four mines in NSW’s Gunnedah Basin, told a parliamentary inquiry of difficulties securing debt and insurance cover as the finance industry clamps down on its exposure to coal and its high-carbon emissions.
Major Korean insurers decided this week to stop insuring coal projects after UN SecretaryGeneral António Guterres urged countries to end a
“deadly addiction to coal”.
Whitehaven said momentum may prove hard to stop.
“I would suggest that while it has taken some time for the environmental, social and governance considerations in insurance to gain momentum, it looks like they may outshoot the banks in terms of their response,” Whitehaven chief executive Paul Flynn told an inquiry into the prudential regulation of Australia’s export industries.
“And that is making insurance very difficult to the point that the industry is now exploring self-insurance opportunities given that we understand that trend.”
ANZ chief executive Shayne Elliott said in December he was proud the bank had not lent “a dollar” to any coal miners since his appointment in 2016.
The role of coal in the longterm energy mix was also called into question by the International Energy Agency on Tuesday after it declared no new coal mines, oilfields or gas fields should be opened up if the world is to reach net-zero emissions by 2050.
Thermal coal prices are trading at their highest levels since 2008 and IEA data shows there is little sign the world’s coal consumption is set to decline substantially in the coming years.