Adani calls for next government to step in to underwrite mining

Controversial miner Adani is warning of dire ramifications if the next federal government does not step in for banks and insurers.

Major coal and gas-related projects supplying jobs in Queensland won’t be built and the economy will suffer if the next federal government doesn’t step in with a way for the sector to get cash and insurance, the Australian boss of Adani has said.

It comes as a new and separate report found coal and gas heartlands such as Central Queensland are concerned about missing out on economic opportunities, increasingly unstable electricity supply, and rising power costs if the next government fumbles the “inevitable” shift to net-zero emissions.

Many insurers are no longer funding or underwriting businesses and projects directly or indirectly linked to the thermal coal industry, or coal and gas related electricity generation projects as financial institutions work to phase out exposure to the sector by as early as 2025.

This has angered those in the coalmining industry and small businesses in regions still dependent on the fossil fuel which have been finding it increasingly difficult to get loans or insurance.

Adani Australia chief executive Lucas Dow, in a speech to be delivered today, has called on “all political parties” to support the introduction of a mutual insurance fund underwritten by the next federal government.

Adani Australia CEO Lucas Dow

“Banks and insurers denying service to businesses directly and indirectly involved in the coal and the gas sectors is an unacceptable risk to an industry that helps fund the way of life many of us take for granted,” he said.

“It’s time for our political leaders of all colours to step in and act where the market has failed.”

Mr Dow said the government would need to provide an initial drawdown sum to ensure solvency in the early years of the mutual fund, before it was self-sustaining in five years.

A Liberal-stacked committee looking into the issue recommended a mutual fund be established, though the government has yet to commit to doing so.

Resources Minister Keith Pitt said the Coalition, if re-elected, would establish a taskforce to examine insurance availability and pricing to investigate the extent of this problem and to determine the best way forward.

Labor, in its dissenting report from the inquiry, said the recommendations overall if put in place would impose a substantial material risk to the Australian economy, and blamed the Coalition Government for failing to put in place “coherent policy”.

Meanwhile, a new report from regional climate charity The Next Economy found discussions around the move away from coal and gas toward net zero had shifted dramatically since the 2019 election — when Adani’s Carmichael mine was a lightning rod for voter’s fears about their future.

The controversial Carmichael megamine in operation. Picture: Cameron Laird

The majority of the 500 people and businesses in resource regions surveyed accepted the transition had to happen, but feared the wrong federal government policy settings could lead to missed economic opportunities, even worse skill shortages, rising power costs and skyrocketing insurance.

According to the report the rapid expansions of large-scale renewable energy projects and green hydrogen proposals across many parts of Australia — including Gladstone — played a part in a shift from net zero scepticism to acceptance.

The Next Economy chief executive Dr Amanda Cahill said people in the resource regions realised things were changing quickly and wanted to see a clear plan and support to manage them.

“If we want to take advantage of the wide range of new economic opportunities available … in renewable energy generation and storage, the mining and processing of critical minerals … we need to act now,” she said.

“The next federal government has a lot of work to do.

“I hope that whoever it is shows the leadership and vision to grasp this once-in-a-generation opportunity, and to step up to the task of supporting our regions as the energy system changes.”

Originally published as Adani calls for next government to step in to underwrite mining