As era of King Coal winds down, bank financing dries up
Bill Rau deals in rubies and Rembrandts, and if you told him a year ago he’d be traveling to England to buy an old lump of coal, he would have called you crazy.
Then he saw it — a “monumental specimen” excavated from an Italian mine in the 1890s.
“I had to buy it,” he thought. “This is a museum piece that was not in a museum.”
Rau, CEO of M.S. Rau Antiques in New Orleans, said there’s been strong interest in the piece — listed on the company’s website for $34,500 — though none from the coal industry This would have been a glorious thing to put in an office,” he said. “(But) coal people aren’t feeling terribly wealthy at the moment.”
Demand for the commodity has been dropping as competing fuels become less expensive. And in the past few weeks, coal companies have seen major banks turning their backs on the industry in public.
News that Morgan Stanley, Wells Fargo, Citigroup and Bank of America had all released coal-lending policies that pledge to decrease credit availability to the sector met with much fanfare around the time of the Paris Climate Conference, where world leaders met to hammer out an agreement on keeping global temperature at manageable levels.
“2015: The year banking’s behemoths went green,” announced a headline on Mineweb. com.
That sentiment, that coal’s best days are behind it, feeds into the allure of Rau’s slab of coal, he said.
It’s about the presentation.
His specimen is enshrined in a custom-built wooden case, which Rau imagines could sell empty for $25,000. It is inscribed to commemorate the mine where it was unearthed, Ribolla, and the age of the rock, 300 million years.
Until the mining company was sold in the 1960s, the showpiece greeted visitors to its lobby in Tuscany. Then it was sold to an English antiques dealer, where Rau found it.
The price tag is also about what the piece represents — a time when coal was king, “which was, I guess, probably until last week,” Rau joked, pouring a bit of salt on the wounds of the cash-strapped, environmentally unpopular fossil fuel.
At least eight global banks have policies guiding their support of coal mining and power projects, but analysts say that’s more a sign of coal’s eco- nomic pickle than an environmental statement.
“I doubt their board of directors cares that much about the environment,” said Spencer Cutter, an equity analyst at Bloomberg Intelligence.
“I wonder if the banks are saying one of the reasons we’re pulling back from coal is environmental — and that may be the case in certain cases — but at the same time banks are economically driven,” he said.
“I think they may just be trying to use that as a way to rationalize — ‘Hey, the coal sector’s going down the tube and we want to get out,’” Cutter said.