Coal market in danger of more company exits, stranded assets as challenges rise

GOLDEN Energy and Resources’ (Gear) move to restructure or exit the thermal coal industry could be a sign of things to come, as the industry battles challenges such as banks halting the funding of coal companies and an increasing global focus on environmental, social and governance (ESG) factors.

Market watchers polled by The Business Times reckon the impact of banks ceasing funding for coal projects is likely to be severe, and financing for coal is becoming increasingly difficult.

Jigar Shah, head of sustainability research at Maybank Investment Banking Group (MIBG), said the lack of available funds could hurt coal producers’ expansion plans, and cause assets in the industry to become stranded.