Business

Westpac coal refusals a blow for Adani

Westpac bank signage
Westpac logo file image (AAP) Source: AAP

Australia's oldest bank has updated its climate change action plan, which appears rule out funding the controversial Adani mine.

Westpac appears to have ruled out funding the controversial Adani mine with a new climate change action plan that will limit its exposure to thermal coal projects.

Australia's oldest bank said on Friday it would limit thermal coal project lending to those sited in already-producing basins, and where the coal quality is highest.

The bank said the move, which seemingly ends the possibility of any big four bank funding for the Indian mining giant's project, demonstrated support for the transition to a zero-emissions economy.

"Westpac recognises that climate change is an economic issue as well as an environmental issue, and banks have an important role to play in assisting the Australian economy to transition to a net zero-emissions economy," chief executive Brian Hartzer said in a statement.

Westpac has long been targeted by protesters over its failure to rule out funding for the $20 billion Adani mine in Queensland's Galilee Basin, which critics say would severely jeopardise the state of the Great Barrier Reef and destroy indigenous land rights.

The Minerals Council of Australia attacked the move as "cynical virtue signalling", with chief executive Brendan Pearson downplaying the significance of Westpac's announcement.

"The bottom line is that one bank, with very limited exposure to the resources industry, is not going to lend to a mine project that it wasn't asked to support in the first place," he said in a statement.

Mr Pearson said there is strong global demand for high quality coal, as found in the Galilee basin, to replace low quality coal in new low emissions power generation.

Federal resources minister Matt Canavan - a senator from Queensland - accused Westpac of abandoning his state.

"Under this decision that Westpac has made, a mine in the Hunter Valley in NSW would be good and a mine in the Galilee in Queensland would be bad," Senator Canavan said.

"I can only conclude from this decision by Westpac they are seeking to revert to their original name as the Bank of NSW because they are turning their back on Queensland."

He said Westpac should support a mine like Adani over less efficient mines outside of Australia if it wanted to combat climate change.

ADANI: WHERE THE BANKS STAND

* Commonwealth Bank quit an advisory role on the project in August 2015

* National Australia Bank said in September 2015 that it would not finance the project

* ANZ said in December 2016 it is scaling down its exposure to mining