Interesting article in today's AFR about local Aussie banks...

Interesting article in today's AFR about local Aussie banks continuous decrease in funding to Australian resource sector. Some important points from story as below:

Australia’s critical minerals producers are more and more funded by end consumers, shareholder equity, offshore banks or government lending agencies like Export Finance Australia, the US Department of Defence and Japan’s Green Innovation Fund.

Aussie banks trying to avoid risk appetite around reputational risk and ESG, it is those areas that have become much more difficult for banks to navigate than was perhaps the case 10 years ago and that has contributed to banks being a bit less willing to engage.

Comment from BHP and Rio Tinto: Huge increase in supply of metals like nickel, copper, rare earths aluminium and lithium will be required if the world is to keep global temperature rises below 2 degrees.

Comment from CBA: Critical minerals such lithium, cobalt, nickel, copper, manganese have an essential role to play in the transition to net zero.

Rare earths and lithium were more technically complicated than the coal and iron ore sectors that dominated the past two decades of mining in Australia, as customers for those “future facing” commodities put great importance on the chemical purity of the materials they put into things like batteries.