NAB has told a government committee its funding provided to ASX-listed mining groups has not conflicted with its policy to stop financing new thermal coal projects, despite an MP saying the companies are seeking opportunities in the area.
Greens MP Adam Bandt had issued questions on notice through the House of Representatives standing committee on economics to the big four bank about its commitments around loans in thermal coal.
In November, the bank declared it would be exiting thermal coal by 2035.
The bank had previously declared it would not be financing new thermal coal mining projects in December 2017.
But Mr Bandt stated since NAB rolled out the financing policy, it has “reportedly provided funds to the largest [pure-play] coal mining companies on the ASX, New Hope Group and Whitehaven Coal”.
Both companies, he wrote, are pursuing new thermal coal mining projects – with the funds that New Hope received being placed towards thermal coal project New Acland Stage 3.
Further, Mr Bandt said NAB had funded Coronado Global Resources at least twice since October 2018, on both occasions supporting it to extend the life of the Curragh coal mine, which has a significant thermal component and supplies the Stanwell coal-fired power station.
Coronado had stated shortly after October 2018 that it had extended its contract to supply thermal coal to the Stanwell coal-fired power station by a decade to 2038.
According to Mr Bandt, NAB refinanced the loan and provided additional debt to expand the Curragh coal mine in September 2019.
In recently published answers from the bank, NAB responded by saying while it continues to support existing customers, it has cut off lending to new thermal coal projects.
“In November 2019, we also capped our thermal coal mining exposures at current levels and announced we would reduce thermal coal mining financing by 50 per cent by 2028, intended to be effectively zero by 2035, apart from residual performance guarantees to rehabilitate existing coal mining customers,” the answer read.
“We also announced we will not take on new-to-bank thermal coal mining customers. While we do not discuss the details of individual customers, our lending profile is consistent with these policies.”
Mr Bandt had also asked what assurances can NAB provide that none of its funds loaned to Whitehaven in February have been or will be used to fund new thermal coal mining projects.
NAB responded by saying it is assessing all thermal coal-related transactions against its policy commitments.
“While we do not discuss the details of individual customers, our credit risk assessment and due diligence processes are designed to ensure that our lending profile is consistent with our policies,” NAB stated.
“Any new lending facilities or refinancing to customers across the mining and energy sectors will be assessed to ensure continuing compliance with our policy commitments.”
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].