Press stories indicate that the project is looking to ramp up production over time to 50Mtpa, which cumulatively could lead to CO2 emissions of several gigatonnes.
We question the economic and environmental logic in providing credit to Carmichael. In February, the German engineering group Siemens drew the ire from both climate activists as well as asset manager BlackRock for their provisioning of $18mn railway signaling to Carmichael.
Providing $650mn of funding - like SBI is intending to do - is much more potent in terms of enabling Carmichael than what Siemens did, in our opinion. We believe key bond investors/lenders of USD such as Athene, Jupiter Fund Management, TIAA, Allianz and BlackRock should engage with SBI if they perceive fresh onward lending of their invested money to the development of new thermal coal mines to be against their respective investment policies.