SocGen abandons Galilee finance talks

SOCIETE Generale has abandoned plans to help finance GVK Hancock’s $10 billion Alpha coal project and associated rail and port project after the bank was targeted by activists in France.

Blair Price

“Just days after protesters staged rallies at the bank's Paris and Pau branches, an email revealed the bank would drop all involvement in the project,”The Australian reported yesterday.

"... in the context of the Apha Coal project's delay, Societe Generale has decided, in agreement with GVK-Hancock, to suspend its mandate,” an email from group head of Sustainable Development Jean-Michel Mepuis said.

“The bank has therefore no involvement with the project. You can relay this message in your networks."

SocGen also mentioned delays in a tweet on Friday.

“In the context of the Alpha Coal project’s delay, Societe Generale has decided, in agreement with GVK-Hancock, to suspend its mandate. The bank has therefore no involvement with the project.”

GVK-Hancock told Reuters it was focused on finalising approvals, fighting legal disputes and securing supply agreements “before seeking financing”.

"We have been working with Societe Generale on a specific element of the financing arrangements for our projects, but are not currently working on that specific work package and as such do not require their services at this time," GVK Hancock told the newswire.

Greenpeace France used Facebook to call SocGen’s withdrawal “good news”.

“Societe Generale of France is the latest of nine global banks – including Deutsche Bank, HSBC, Royal Bank of Scotland, Barclays, Morgan Stanley, Citigroup, Goldman Sachs and JP Morgan Chase – to move away from financing Galilee Basin coal projects, which includes Indian firm Adani's Carmichael mine, the the Institute for Energy Economics and Financial Analysis said, adding that the two projects were expected to begin operations in 2014 when they were bought ‘at the peak of the cycle in 2011’ but that, currently, neither was near financial close,”The Australian reported.

GVK Hancock’s $6 billion Alpha coal project received Queensland government approval in October after a six-year greentape journey which involved more than 500 consultants and around 300 collaborative scientific studies.

The proposed open cut mine has 1.8 billion tonnes of resources, 1.2 billion tonnes of reserves and aims to produce around 32 million tonnes per annum for 30 years.

GVK Hancock, a company part-owned by billionaire Gina Rinehart, also has the Kevin’s Corner project and expansion option Alpha West projects in the Galilee Basin.

When combined, GVK Hancock’s three projects could create one of the largest coal mining operations in the world, holding total resources of 8 billion tonnes and peak capacity of about 80 million tonnes per annum.