Why Australia's ANZ Bank is cutting off lending to coal-fired plants
Australia’s ANZ Banking Group, the smallest of the nation’s “Big Four” banks, intends to cut off funding for new coal-fired power plants by lending at least A$10 billion over five years to projects that reduce greenhouse gases.
The five-year commitment will fund a range of low-carbon initiatives such as renewable, low-emissions transport, reforestation and carbon capture and storage (CCS), which the coal industry believes will prolong the viability of fossil fuels.
RELATED TOPIC: United Kingdom says goodbye to coal mining
ANZ is essentially ending its support of power plants that don’t use new, advanced technology to reduce carbon dioxide emissions in an effort to create a low-carbon economy over the next five years.
“We understand some of our stakeholders view our financing of fossil fuel industries as a material risk and in direct conflict with our stated position on the need to reduce greenhouse gas emissions,” said ANZ in a statement.
“Today, around 40 percent of the world’s electricity comes from coal-fired power stations and coal remains the cheapest source of fuel. We therefore consider that decarbonization of the economy must be managed responsibly and over time.”
In the past, ANZ has been criticized by climate activists by being Australia’s largest financer of fossil fuel projects, including the controversial Maules Creek mine in New South Wales as well as Adani Mining’s Carmichael project in Queensland.
However, ANZ announced its commitment to the global target of limiting global warming to 2C above pre-industrial times by reporting its progress on climate and setting targets to reduce its own emissions.
A study by University College London reveals that 90 percent of Australia’s coal reserves must be left unburned to keep the world from warming over 2C. According to AGL, 75 percent of Australia’s ageing coal-fired power stations were operating past their “useful life” but are too expensive to shut down.
Australia’s other three major banks may end up doing the same to tighten conditions surrounding the country’s coal industry amid more and more requests to reduce carbon emissions from green groups, who cite potential damage to the nation’s climate as well as the Great Barrier Reef.
Since 2008, the top four Aussie banks have provided over A$36 billion to fossil fuel projects in Australia.
Despite being the smallest of the four major Aussie lenders, ANZ faces the most exposure to the fossil-fuel industry. With coal still the leading fuel for global power generation with a share of about 40 percent of all inputs, ANZ plans to also improve its due diligence processes to lending to coal mining, transportation and power generation.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.