Insurers’ hard stance on coal-related projects putting jobs at risk, industry players warn

Queensland jobs are on the line and local coal mining projects are at risk of being bought up by foreign companies, industry players have warned – as banks and insurers walk away from the sector.

Major projects supplying much-needed jobs in Queensland won’t be built and the economy will suffer if banks and insurers are allowed to keep walking away from backing coal-related projects, industry players have warned.

BMD Constructions, one of Australia’s largest construction companies, recently revealed it had to undertake a global search to find someone to insure their work on Adani’s Carmichael Rail Network.

The company was rejected by 22 insurers, including Brisbane-based Suncorp and titans QBE, Allianz, and IAG.

Many insurers are no longer funding underwriting new thermal coal mining projects or electricity generation and have promised to phase out exposure to the sector by as early as 2025.

Construction companies are struggling to find insurers to get major coal projects underway.

They cite responsibility to act on climate change and concerns increased extreme weather events could make the world uninsurable.

Brisbane-based energy billionaire Trevor St Baker warned coal-fired power stations, which still supply two-thirds of the country’s energy needs, would be unable to keep the lights on.

He predicted coal mines would increasingly be bought up by foreign companies who will insure themselves.

If the banks and insurers are steadfast in walking away, securing insurance will become increasingly difficult and without insurance, projects simply can’t be built, BMD chief executive Scott Power warned.

“There will be projects that don’t get built, and there will be opportunities lost for Queensland and the national economy, and there will be jobs lost,” he said.

Scott Power, Chief Executive of BMD Group.

“Fundamentally what we are seeing is, it seems to me, grandstanding on the part of some of these insurance companies to try and present environmentally sustainably practices without really addressing their fundamental role, which is around insuring risks.”

Townsville Enterprise, the region’s peak economic body, slammed the banks and insurers for taking “unsubstantiated ideological positions” and said it would not let “unfounded assessments railroad the development of Northern Australia”.

An ongoing parliamentary inquiry, ordered by Resources Minister Keith Pitt, has been tasked with investigating the impacts of banks and insurers walking away from coal.

Resources Minister Keith Pitt. Picture: NCA NewsWire / Gary Ramage

Coal and power industry players have already suggested the need for the government to step in and underwrite coal-fired power stations as mainstream bank funding dries up.

Former Queensland Senator Ron Boswell, who appeared at a hearing on Friday, said insurers who refused to provide funding to creditworthy coal and supplier businesses should be reported to the country’s consumer watchdog.

Mr St Baker, who has interests in both coal and renewable projects, said “if you can’t insure, you can’t stay in business”.

“It’s as simple as that,” he said.

“Businesses need insurance to say in business, the country needs coal fired power stations to be in business.”

The Insurance Council of Australia, which represents the sector, said there was growing recognition that climate change and climate-related risks were a source of financial risk.

The sector, the ICA submitted, was “uniquely qualified to understand the pricing of risk”.