The Register-Herald, Beckley, West Virginia

Today's Front Page

November 9, 2010

PNC to halt financing for mountaintop mining

By Dylan Lovan Associated Press

LOUISVILLE, Ky. — PNC Bank has announced it will stop financing projects that extract coal using a controversial form of surface mining known as mountaintop removal.

The Pittsburgh-based company is the latest of a group of major commercial lenders that have backed away from underwriting mountaintop removal projects after pressure from environmental activists.

PNC said in a statement it will not fund individual projects or “provide credit to coal producers whose primary extraction method is” mountaintop removal.

The surface mining practice has for years attracted the ire of activists and Appalachian residents, who say it contributes to environmental degradation and water pollution. In June, a group of 50 activists gathered at a downtown PNC bank branch in Lexington to protest the bank’s alleged lending to mountaintop removal projects.

“We’re definitely seeing this as a victory and looking at who’s next,” said Martin Mudd, a member of the group Kentucky Mountain Justice, which helped organized that protest.

But coal operators will simply find other ways to fund mountaintop removal projects, an industry supporter said.

“I think (activists) are successful in this instance, but I do not think it will reduce the amount of mountaintop mining that occurs in Kentucky,” said Bill Bissett, president of the Kentucky Coal Association.

PNC’s statement said mountaintop removal “is the subject of increasing regulatory and legislative scrutiny.” Wells Fargo Bank made a similar assertion in July, when the bank acknowledged “significant concerns associated with this (mining) practice.”

The new PNC policy was part of a corporate responsibility document that was updated late last month. PNC spokesman Fred Solomon declined to comment on whether activist protests prompted the bank to change policies.

PNC had become the top financier in the U.S. of companies that engage in mountaintop mining, according to Rainforest Action Network, a San Francisco-based environmental group. The bank assumed the top spot after other big banks recently amended policies regarding lending to mountaintop removal companies, according to the group, which keeps a scorecard of banks and their environmental policies.

An analysis by the environmental group said PNC had an estimated $80 million in investments tied to mountaintop removal in Appalachia. Solomon declined to discuss PNC’s investments. It was also not clear if the company was moving to dissolve its current investments in mountaintop removal companies or applying the policy only to future projects.

Rainforest Action Network said other big lenders, such as Bank of America, Citi and JP Morgan Chase have recently amended their lending policies regarding mountaintop removal.

“Every time another one of the big banks says no to the biggest mountaintop removal companies, that makes it tougher — which in business terms equals more expensive — for the companies to get their financing,” said Amanda Starbuck, director of the group’s global finance campaign.

The group has organized protests and kept a report card of the nation’s large banks and their business dealings with coal operators that use mountaintop removal. Before PNC’s announcement, the report card gave the company an “F.”

Starbuck said the banks are changing their environmental lending policies over concerns about their reputation and increased federal regulation of the mining practice.

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