The Asia Miner

APR-JUN 2019

The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region

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the asia miner • volume 16 • issue 2 22 FEATURE: Coal Today, over 100 globally significant financial insঞtuঞons have divested from thermal coal, including 40 per cent of the top 40 global banks and 20 globally significant insurers. Since January 2018, a bank or insurer announced their divestment from coal mining and/or coal-fired power plants every month, and a financial insঞtuঞon who had previously announced a divestment or exclusion policy ঞghtened up their policy to remove loopholes, every two weeks. In total, 34 coal divestment or restricঞon policy announcements have been made by globally significant financial insঞtuঞons since the start of 2018. In the first nine weeks of 2019, there have been five new announcements of banks and insurers divesঞng from coal. Global capital is fleeing the thermal coal sector. This is no passing fad. Since 2013 more than 100 global financial insঞtuঞons have made increasingly ঞght divestment/exclusion policies around thermal coal. When the World Bank Group moved to exit coal in 2013, the ball started rolling. Following, Axa and Allianz became the first global insurers to restrict coal insurance and investment respecঞvely in 2015, and their policies have subsequently been materially enhanced. Next, some 35 export credit agencies (ECA) released a joint statement agreeing to new rules restricঞng coal power lending. In the same year, the China-led Asian Infrastructure Investment Bank trumpeted its global green credenঞals with the Chairman confirming the Bank was in pracঞce ruling out finance for coal-fired power plants. One of the strongest moves in 2015 came when the world's second largest sovereign wealth fund based in Norway (US$1 trillion) stepped up its exclusion criteria and started divesঞng from coal. When such a significant investor acts, global momentum increases. In May 2018, Dai-ichi Life of Japan issued a new policy Over 100 global financial institutions are exiting coal, with more to come every two weeks a bank, insurer or lender announces new restrictions on coal. Tim Buckley, Director of Energy Finance Studies, Australasia IEEFA, looks at the reasons behind it and future implications for coal. ARE COAL'S DAYS NUMBERED? The math is simple. As the world acts on climate change, coal becomes the most obvious stranded asset.

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