Societe Generale has suspended its involvement in financing a $10 billion coal mine, rail and port project being developed by India’s GVK conglomerate and Australian billionaire Gina Rinehart, citing the project’s years-long delay.
The French bank’s decision is the latest twist for a project originally scheduled to produce coal from 2014, but which has suffered challenges from landowners and green groups, and been complicated by coal prices falling to more than five-year lows.
Developer GVK Hancock said that before seeking financing it is focused on finalising approvals for the project’s Alpha coal mine in the Galilee Basin in Queensland, fighting legal disputes against approvals already won, and securing supply agreements.
“We have been working with Societe Generale on a specific element of the financing arrangements for our projects, but are not currently working on that specific work package and as such do not require their services at this time,” GVK Hancock said in an emailed statement.
The French bank said on Twitter on Friday that, “In the context of the Alpha coal project’s delay, Societe Generale has decided, in agreement with GVK-Hancock, to suspend its mandate. The bank has therefore no involvement with the project.”
The project has been targeted by green groups opposed to coal use and by tourism operators in Queensland, where there are concerns about plans to dredge ahead of expanding a port near the World Heritage-listed Great Barrier Reef.
Green groups, which have been pressing banks to not back coal projects, counted Societe Generale’s withdrawal as another win, following similar moves by Deutsche Bank AG, HSBC Holdings PLC, Royal Bank of Scotland Group PLC and JPMorgan Chase & Co.
Greenpeace France on its Facebook page called the withdrawal “good news”.
A spokeswoman at Societe Generale Corporate and Investment Banking in Hong Kong confirmed the bank’s decision. She had no immediate comment on whether the bank would consider lending for the project when GVK Hancock is ready to seek financing.
GVK bought 79 percent stakes in the Alpha and Alpha West coal projects and a 100 percent stake in another project from Rinehart’s Hancock Prospecting for $1.26 billion at the peak of the coal boom in 2011, aiming to start producing in 2014. It still owes $560 million for the purchase.