African white elephant: Australian taxpayers could finance South African coal

African white elephant, a report released today by Jubilee Australia and The Australia Institute examines the proposal for Australia’s export credit agency to fund a coal mine in South Africa.

The tax payer-backed Export Finance and Insurance Corporation, known as Efic, is considering a loan to develop the Boikarabelo coal project in Limpopo Province, South Africa.

The Boikarabelo mine has approval to extract 32 million tonnes per year of raw coal, making it a similar size to some proposals in Australia’s Galilee Basin. Like Adani’s Carmichael mine, this project could lead to the development of an enormous new coalfield – the Waterberg Basin.

South Africa’s coal competes with Australian coal in key markets, but has the advantage of being much closer to India, saving a week of shipping time compared to Australia’s coal ports.

“Developing a South African coal mine with Australian taxpayers’ money is madness, no matter what side of Australia’s coal debate you are on,” said Rod Campbell, Research Director at The Australia Institute.

“At best the project fails and we lose our money, at worst it leads to increased greenhouse emissions and damages our own coal industry.”

“This project also comes with environmental and social risks. Local community groups in South Africa are opposed to it and overall South Africa’s mining industry has a poor record on accountability, human rights and environmental issues,” said Luke Fletcher, Director of Jubilee Australia.

“Efic has provided finance to some of the worst social and environmental catastrophes in the Asia Pacific region, including the Ok Tedi Mine, the Bougainville Panguna mine, and the PNG LNG project. They have even less experience in assessing projects in Africa.

“We urge Efic’s management, board and responsible minister, Trade Minister Steve Ciobo, to immediately rule out involvement in financing coal in South Africa.

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