Call for more protection for coal industry
Monday, May 9th, 2022
Adani Australia chief executive officer and Country Head Lucas Dow has called on all political parties to protect the nation’s prosperity by ensuring coal communities can access reasonably priced finance and insurance services.
In a presentation at the Sydney Mining Club, Dow recounted the testimonies to an Australian Parliamentary Inquiry by small and family-owned companies in central Queensland and the Hunter region where rising insurance and finance costs are threatening their livelihoods.
Other small north Queensland businesses testified to the Inquiry that they could not get cover at all because they did not meet insurers’ requirements that not more than 25 per cent of their business be in or supporting the coal industry.
“Coal is Australia’s second most valuable export after iron ore,” Dow said.
“Miners and the businesses that support them are proud they are helping our nation pay for things like the National Disability Insurance Scheme, schools, roads, and national security.
“Australia’s miners are proud that that no other country does mining as well as we do.
“But while demand for Australian coal remains strong, the prosperity and sustainability of coal mining communities is being put at risk by the actions of banks and insurers.
“Banks and insurers denying service to businesses directly and indirectly involved in the coal and the gas sectors is an unacceptable risk to an industry that helps fund the way of life many of us take for granted.
“It’s time for our political leaders of all colours to step in and act where the market has failed.”
Dow said the answer was an unequivocal commitment from Australia’s political parties to support the introduction of a self-sustaining coal industry mutual insurance fund.
A mutual insurance fund was one of the key recommendations of the Australian Parliament’s Joint Standing Committee on Trade and Investment Growth’s Inquiry.
“The industry has done its homework and has developed a mutual insurance fund model that would be self-sustaining within five years,” Dow said.
“The challenge is getting the fund off the ground initially, and to do that we’d need the government to provide an initial drawdown facility to ensure fund solvency in the early years of the fund.
“Importantly this would not be a handout and would only take the form of a contingent liability in the event of potential extreme payout events. Should the drawdown facility need to be accessed, the government would be repaid at commercial rates.
“This goes beyond a lip service pledge of support for the 50,000 Australian voters and their families who directly work in the coal sector, it goes beyond energy security, it’s about backing Australians and Australian industry.
“This is real action that will secure jobs and billions of dollars in investment and taxes.
“Now is not the time for our political leaders to turn their backs on those whose hard work directly contributes to our national prosperity and way of life.”