Axis Capital drops bid to cover Adani's Australian coal mine project

“The Adani Group’s giant Carmichael coal mine is incompatible with international climate targets and AXIS is the 15th insurer and 58th financial institution to rule out support for this project,” said Peter Bosshard, coordinator of the Unfriend Coal campaign.


 

NEW YORK/LONDON: 

Lloyd’s of London insurer Axis Capital has become the latest to rule itself out of providing coverage for Adani Enterprises Ltd’s contentious Carmichael coal mine project in Australia, a source close to the company said on Wednesday.

 

Axis has withdrawn its quotes for insurance of the mine’s railway, the source told Reuters.

 

The insurer will publish a formal policy to cut its exposure to coal more broadly in the weeks ahead, the source added.

 

Axis joins a growing list of global insurers to refuse to insure the project, which received the green light from Canberra in June despite fierce opposition from environmental groups.

 

“The Adani Group’s giant Carmichael coal mine is incompatible with international climate targets and AXIS is the 15th insurer and 58th financial institution to rule out support for this project,” said Peter Bosshard, coordinator of the Unfriend Coal campaign.

 

Sixteen insurers including Chubb Ltd, Australia’s QBE and Suncorp Group Ltd and European insurers Allianz and Zurich Insurance Group AG have already adopted policies to cut their exposure to coal projects, according to lobby group Unfriend Coal.

 

“All eyes are now on Lloyd’s insurer Canopius,which may still insure construction of the mine’s railway. Canopius must swiftly rule out support as well, or it will emerge as the insurer of last resort for climate-busting projects,”said Peter Bosshard

Canopius said in a statement on Friday it was “not involved in any negotiations to provide insurance coverage for the Adani mine project”.

 

HoweverAdani insists it has “the necessary insurance requirements in place, consistent with our construction activities”.

 

Adani has said it will not discuss commercial or supplier relationships in an attempt to prevent business partners becoming the target of activists.

 

“Details on insurance providers for the Carmichael project are commercial-in-confidence, however we have the necessary insurance requirements in place consistent with our construction activities.”

 

“Adani continues to be abandoned by its corporate partners that don’t want to be associated with a destructive new coal project,” Market Forces campaigner Pablo Brait said.

 

“AXIS’ move, following engineering firm Aurecon’s severing of ties to Adani, shows the Carmichael coal project is toxic, not just for our climate but for a company’s brand too.”

 

The growing list leaves relatively few insurers with the capability to support Carmichael and will mean increased attention on those who have yet to make definitive statements.
 

US-based financial giant AIG on Friday declined to comment on its position. The investor action group Market Forces says it understands Adani previously held policies with AIG that had been due to expire on 30 September.
 

Adani’s options for insurance are rapidly shrinking for good reason,” Brait said. “No insurance company that properly understands the climate crisis would go anywhere near a massive new coal project.
 

“Now the focus is on AIG and Lloyd’s. AIG needs to come clean on its current relationship to the Carmichael project and Lloyd’s must provide assurances that its market will not be used to underwrite a disastrous new coalmine and rail line.”

 

The Queensland-based Carmichael mine is expected to chalk up annual production of 8 million to 10 million tonnes of thermal coal, responsible for a large slice of the world’s carbon emissions.As a result, 14 large insurers including AXA SA, Allianz, Liberty Mutual Insurance Co, Munich Re, Swiss Re and local market leader QBE Insurance Group Ltd have already confirmed they will not insure Carmichael, according to lobby group Market Forces.


Carmichael mine, which received the green light in June after nearly nine years of fierce protests and political debate, would produce 4.6 billion tonnes of carbon dioxide over its lifetime and open up even larger mines for exploration in Queensland’s Galilee basin.
 

To meet the Paris Agreement’s targets and limit global warming to 1.5 degrees, no new coal mines can be built anywhere in the world. Insurance companies are already bearing the cost of extreme weather driven by global warming. Rather than continuing to exacerbate the crisis, other insurers such as Canopius, Lloyds and AIG need to follow in AXIS Capital’s footsteps and give the Adani Carmichael project the wide berth it deserves,” Brait said.
 


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