With Western banks under pressure from shareholders to show action on climate change, coal executives say they are having to scout for alternative funding.
“If you are a business with a bank right now it’s easier. If you want to build a new mine, forget it, that has become impossible,” said Gerhard Ziems, chief financial officer at Australian coal miner Coronado Global Resources.
Lloyds said in February it would stop financing miners that generate more than 5% of their revenue from thermal coal by the end of this year, and would no longer provide general purpose banking to new coking coal customers. The company is now looking to reduce its debt and fund its project to double annual mining capacity to about 3 million metric tons by selling additional shares, as well as listing on the London Stock Exchange next year.
With funding hard to come by from Western banks, coal miners outside China have turned more to equity markets this year. The biggest Western lender to coal miners in 2020 was Deutsche Bank with $538 million followed by Citi at $300 million. By 2021, that had dropped to $255 million for Deutsche and $218 million for Citi, according to data compiled by Reclaim Finance.
Bens Creek listed shares partly because of the lack of appetite from banks to support any expansion of coal mining, chief executive Wilson said.
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