Many insurance companies have shied away from providing cover for the Adani Group’s proposed coal mine in northeastern Australia because of the huge amount of flak the controversial project has received from the public and environmentalists.
Ten of the world’s largest insurers and reinsurers have refused to provide support for the US$16.5 billion Carmichael coal mine and rail project 160km northwest of Clermont town in central Queensland because of concern it would exacerbate climate change.
Five global reinsurers – AXA, SCOR, FM Global, QBE and Suncorp – have now pledged not to provide insurance for the project. Meanwhile, another five – Allianz, Munich Re, Swiss Re, Zurich and Generali – have existing climate policies that exclude support for the mine, Asia Insurance Post reports.
Earlier this month 73 prominent environmental organizations wrote to 30 global insurance firms, urging them not to provide insurance for the mine, which would be one of the biggest in the world.
However, certain prominent US-based re-insurers such as AIG, AXIS Capital and Berkshire Hathaway are reportedly yet to respond on this matter.
Environmental groups have said the Carmichael coal mine and rail project would produce 4.6 billion tonnes of carbon dioxide emissions over its lifetime, equivalent to more than eight years of greenhouse gas emissions in Australia.
They also argue that a rail line to transport the coal to an export terminal at Abbot Point near the Great Barrier Reef, would spur dredging and ship traffic that could do irreversible damage to the reef, which is one of the world’s most biodiverse ecosystems and a World Heritage site.
Adani has already been forced to self-finance the Carmichael mine after 37 financial institutions around the world, including all of Australia’s major banks, said they did not want to be involved.
However, Adani Mining has said claims that the mine will worsen climate change are untrue and it will ensure that it has the necessary insurance to carry out business activities in Australia, Business Standard reports.