Standard Chartered has followed the Commonwealth Bank of Australia (CBA) in abandoning Australia’s largest proposed coal mining project.

The future of Adani’s US$12bn Carmichael mine in Queensland had been thrown into doubt after the Federal Court of Australia ruled against government approval on environmental grounds. The government had initially granted approval last year.

The mine would require a new railway line and would lead to the expansion of a port located in the Great Barrier Reef in order to export its produce.

GTR reported in July that engineering work on the mine, based in the Galilee Basin, had ground to a halt ahead of the verdict, with Adani citing “changes to a range of approvals” as the reason behind the moratorium.

Standard Chartered says in a statement: “As a result of this ongoing review by Standard Chartered and the delays experienced by Adani in receipt of its project approvals, both parties have agreed to end the bank’s role in the Carmichael project.”

It had previously cast doubt on its involvement in the project, due to the potential environmental impact.

Last week, CBA confirmed that its advisory role had been terminated although failed to offer a reason, citing client confidentiality.

Banks including BNP Paribas, Crédit Agricole, Société Générale, Barclays, Citigroup, Deutsche Bank, Goldman Sachs, HSBC, JP Morgan, Morgan Stanley and Royal Bank of Scotland have all kept their distance from the project, with the price of coal coupled with the potentially toxic reputational risk of the mine acting as a deterrent.

The Queensland Resource Council (QRC) has lashed out at the “disruptive and delaying” tactics of “very well-funded anti-mining activists”, which its CEO Michael Roche claims could cost the Queensland economy 10,000 jobs and billions of dollars in revenue.

 

“The Carmichael coal project remains the biggest news in Queensland’s and Australia’s coal sector from a capex perspective,”  Joshua Paffey, Norton Rose Fulbright

 

Coal accounts for 43% of Queensland’s total exports and as coal prices continue to plunge, there have been grave concerns about the impact on the economy, even before the latest events at Carmichael.

Norton Rose Fulbright partner Joshua Paffey confirms the project’s value to the local economy, telling GTR: “The Carmichael coal project remains the biggest news in Queensland’s and Australia’s coal sector from a capex perspective and is of considerable importance to Queensland’s infrastructure and construction industries.”

With the project on hold, plans to construct associated infrastructure projects will also be placed on the backburner, as producers and miners continue to scale back their investments in Australia’s coal mining sector. Glencore announced this year that it would cut coal production by 15%, with Vale taking a 71% haircut on its coal assets Down Under.

It’s expected that Adani will appeal the decision and Tony Abbott’s Liberal government remains supportive of the project. However, given the furore and media glare on the mine, it remains to be seen whether the Indian company can attract the finance required to make it operational.

Environmental groups have welcomed the latest developments, with Greenpeace campaign manager Sebastian Bock saying: “Getting anywhere near this controversial project is now a massive reputational risk even for some of the world’s most powerful banks. The Australian government should now take notice and rethink their support for one of the most environmentally destructive fossil fuel developments in the world.”