Banking on coal: SUEK bond review

2 minute read

Who wants to run an inaugural bond deal for Sibirskaya Ugolnaya Energeticheskaya Kompaniya (SUEK) "one of the largest exporters of seaborne thermal coal globally?"

It seems Bank of America, Citi and Commerzbank have appetite. Russia's major thermal coal producer is SUEK. Its operations cover 28 mines in several regions and is one of the biggest exporters of seaborne thermal coal globally.

Siberia is not only home to catastrophic wildfires and melting permafrost, but also billions of tonnes of thermal coal. In order invest in capital expenditure to extract this coal, SUEK is looking to access international bond markets.

To facilitate this, it appears that Bank of America, Citi and Commerzbank have landed the mandate to run an inaugural US dollar five-year bond deal. SUEK produces around 110Mt coal per year, equivalent to approximately 300-350MT of CO2e emissions.

With regards to SUEK’s approach to climate change and transition, we believe that the company’s statement on the issues clarifies their intent, in that they view environmental problems to be part of a complex and multi-faceted scientific and sustainable development agenda. However, in terms of the parties running this bond deal, we believe that it is not aligned with any principles around climate transition, climate change mitigation or “net-zero” commitments.