Lloyd's Insurer Apollo Syndicate to Exit Adani's Carmichael Coal Mine

By Dieter Holger

Apollo Syndicate Management Ltd., which is part of the Lloyd's of London insurance market, doesn't plan to keep underwriting the construction of Adani Mining Pty. Ltd.'s Carmichael coal mine in Australia, joining other insurers that have backed away from one of the world's biggest coal projects amid pressure from environmentalists and dim long-term prospects for coal.

Julian Cusack, chair of the board of directors at Apollo Syndicate, told nonprofit Market Forces that Apollo Syndicate was underwriting "one construction liability policy" for Adani's mine but that policy terminates September 2021 and the firm won't provide anymore insurance, including for the project's port and rail extension, according to emails reviewed by The Wall Street Journal.

"We will not participate in any further insurance policies for risks associated with this project," he said. Mr. Cusack confirmed to the Journal that he wrote the email, but didn't provide additional comment.

The Stop Adani environmentalist campaign said that Apollo Syndicate is the 27th insurer and 17th Lloyd's of London insurer to rule out the mine. Lloyd's of London, the world's oldest insurance market, said in 2018 that it would divest from coal but doesn't have a coal policy for underwriters like Apollo Syndicate that are part of its market. Lloyd's of London didn't immediately respond to a request for comment.

Many big European insurers, including Swiss Re AG and Zurich Insurance Group AG, have said they would stop backing coal projects.

Indian conglomerate Adani didn't immediately respond to a request for comment.

Adani's Carmichael coal mine under construction in Queensland, Australia, has drawn fire from environmentalists after authorities greenlighted the project last year. As of early 2020, the mine has already drawn more than $1 billion in contracts and will produce some 10 million metric tons of coal a year when finished, according to Adani's website.

"The Carmichael mine, through mining taxes and royalties, will generate billions of dollars for government in its first 30 years of operation. This money will help to build new schools, hospitals and roads for Queensland," according to Adani's website.

Pablo Brait, the campaigner at Market Forces who exchanged emails with Apollo Syndicate's Mr. Cusack, said he hopes more insurers will follow and that Adani needs to explain to investors, bankers and contractors how it plans to insure the mine in the future.

"With the mainstream insurers and now the Lloyd's market turning their backs, how will it deal with the significant risks that running a massive coal mine, rail line and port entail," he said.

Write to Dieter Holger at dieter.holger@wsj.com; @dieterholger

(END) Dow Jones Newswires

October 28, 2020 12:27 ET (16:27 GMT)

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