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Where there’s muck there’s — sometimes — brass

Coal is about the most basic commodity. It has become deeply unfashionable in recent years, tarred as the worst culprit in global warming. The charge may be true, but the accusations are so vehement partly because promoters of other hydrocarbons — oil, gas, biofuels — want to disguise their own responsibility.

That coal is a troubled sector has become a truism among bankers and investors. Two big US producers, Arch Coal and Alpha Natural Resources, have filed for Chapter 11 bankruptcy. Peabody Energy, the biggest, has lost 99.8% of its market cap in five years.

Struggling to right itself, Peabody wants to sell three mines to Bowie Resource Partners, a coal investment offshoot of Trafigura. Deutsche Bank and Citigroup were to have financed the deal, and refinanced Bowie’s debt. This week bankers said that deal was struggling to gain traction.

But don’t get the idea coal is a no-go zone for financial institutions. On the other side of the world, Siberian Coal Energy Co (Suek), the largest coal producer in Russia, has bagged $1bn from international banks in the biggest foreign loan to Russia since 2014.

ING, UniCredit, Commerzbank, Intesa Sanpaolo, Nordea, Rabobank and Société Générale were all up for the deal, which may be increased.

No doubt risk committees have good reason to like this credit, but not Bowie. Russia will be burning plenty of coal for a long while, and Suek exports to Asia.

But the US is not going off coal soon, either. The Energy Information Administration predicts power station demand will flatline to 2040, rather than falling, with coal still making 34% of US electricity.

US coal’s financial woes may or may not be attributable to lenders trying to keep their hands clean for reputational reasons. But it’s clear that for many banks, any such scruples don’t apply in other parts of the world.

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