A contractor at a controversial Australian coal mine said he had failed to secure insurance for the project due to environmental concerns, highlighting how fuel funding in the country had dried up.
BMD Group, which works at Adani Enterprises’ Carmichael mine, said in a appeal during a parliamentary inquiry that he may have to seek insurance from the government.
BMD’s claim was one of more than a dozen business submissions warning that stopping funding to the sector due to environmental, social and governance issues risked destroying Australia’s export industry. thermal coal by 20 billion Australian dollars (15.5 billion dollars) per year.
BMD builds a section of a railway in Carmichael, a thermal coal project of 10 million tonnes per year that inspired climate protests. BMD was turned down by at least 33 underwriters for liability insurance on the project due to affiliation with Adani, according to the former’s submission.
BMD said either customers would have to absorb the risk on behalf of their subcontractors if they could not get insurance, or the government would have to provide insurance out of public funds.
“The absence of any action can only result in very few entrepreneurs willing or able to undertake this critical infrastructure work,” says the group.
BMD told the inquiry he had been the subject of activism from climate change protesters and anti-charcoal groups, including threats of violence against the owners and families of the group.
Australia’s investigation into the financial sector’s treatment of export industries came after Resource Minister Keith Pitt accused banks and pension funds of “corporate activism.”
“This is precisely why I requested this investigation and I look forward to the outcome,” Pitt said of BMD’s submission. “How is it possible that the company that is building a railway line that could transport livestock, grain, people or anything else is denied insurance because it carries coal?” The moved product does not affect the risk of construction. “
Adani, who belongs to the Indian tycoon Gautam Adani, told the survey that banks and insurers were prepared to completely withdraw from coal by 2030, which would have a “dramatic and negative impact” on the industry.
Adani told the Financial Times he had the necessary assurances in place for the entire Carmichael project.
New Hope Group, a coal company, said the consequences of withdrawing financial companies from the sector would be “dire.”
Appea, a group representing the oil and gas industry, said banks and pension funds are increasingly telling companies they can no longer invest in projects due to ESG concerns. But “the positive role that oil or gas can play to ensure energy security in a global economy in decarbonization” is often not taken into account, he argued in a communication.
The Insurance Council of Australia told the survey that its members recognize the importance of the country’s export industries and note the steps investors and regulators are taking to respond to the risks created by climate change.
“The general insurance industry will continue to support and enable effective risk management for Australian exporters. . . consistent with a contemporary understanding of regulator guidelines and statutory obligations, ”the board said.
BMD did not respond to a request for comment on its insurance status.
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