Australia Coal Miners Woo Private Capital as Banks Get Leery.

Australian coal producers are turning to private loans as banks become more hesitant to lend due to environmental, social, and governance (ESG) concerns. Private credit lenders are stepping in to fill the gap, attracted by the higher interest rates and attractive margins offered by riskier coal projects. This trend highlights the ongoing conflict between ESG proponents and the coal industry, as private capital, including family offices and individuals, are not bound by the same ESG obligations as large funds. Alternative funding sources, such as private equity firms and asset-backed bonds, have also become more prevalent in the energy industry. Additionally, coal miners are exploring the option of selling minority stakes to customers, such as steel manufacturers, to ensure a sustainable supply. The article mentions Whitehaven Coal Ltd.'s recent success in securing a $1.1 billion loan from private credit lenders after struggling to refinance a loan with banks. The lenders in this case were mainly international funds, and the loan came at a higher cost. The article also notes that private credit could be useful for coal miners transitioning into new business lines, such as metallurgical coal, which is considered less environmentally harmful than thermal coal. [Extracted from the article]