An Australian daily has reported that the "Commonwealth Bank's role as adviser to Australia's biggest coal project, Adani Mining's proposed Carmichael Mine in Queensland, Australia, has ended." Saying that this has dealt a heavy blow to the top corporate house, known to be close to Prime Minister Narendra Modi, 'Sydney Morning Herald' has said that this has dealt "a heavy blow" to its prospects, adding, "Fairfax Media has confirmed" the development.
The daily says, this comes "as environmentalists claimed a victory in their case against the project after the Federal Court overturned Adani's federal environmental approval. Environment Minister Greg Hunt was forced to concede defeat for not taking into account two threatened species – the yakka skink and ornamental snake – before he signed off on the project in 2014."
Saying that the Commonwealth Bank's decision "now casts doubt on the likelihood that Adani will be able to raise the $16 billion required to build Carmichael and the attending infrastructure such as the rail line and the port facilities at Abbot Point on the Great Barrier Reef", the daily quotes a bank spokesman as saying, "As part of Adani's refocusing of the project on gaining the various outstanding approvals, the financial advisory mandate has ended."
The daily believes, the environmental controversy surrounding Carmichael and the project's financial risk in the face of tumbling coal prices were the main concerns for the decision. However, it adds, an Adani spokesman has said it was "inaccurate" to suggest that the bank has walked away, insisting agreement was actually terminated by the corporate house itself.
"In the event the Commonwealth approvals framework is not further undermined by activists seeking to exploit legal loopholes - thus enabling the project and the thousands of jobs and billions of dollars of investment it would bring to be delivered - Adani would happily work with the bank in future", the spokesman added.
The Commonwealth Bank, says the daily, has announced it has "tightened its environmental and social governance policies at its annual shareholder meeting last November." It adds, "The end of the bank's relationship with the Indian power company could make it more difficult for Adani to attract investment from other banks." The Commonwealth Bank is Australia's largest lender and a leading banker to resources projects around the country.
According to the daily, "Many of the world's biggest coal project funders – Citigroup, Deutsche Bank, Morgan Stanley, RBS, Credit Agricole, BNP, Barclays, Goldman Sachs, JP Morgan and Societe Generale and HSBC – have already said they would not fund the development of a coal project whose export facilities were to be built near the Great Barrier Reef."
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