Banks pull back on funding coal

Tens of thousands of miners were on strike and coal prices were skyrocketing in October 1902. Afraid of unrest, President Theodore Roosevelt sought the help of John Pierpont Morgan. The powerful banker, who held great sway over the coal industry, brokered a deal with the miners that ended the strike. “My dear sir,” the president wrote to Morgan. “Let me thank you for the service you have rendered the whole people.” America’s coal industry is now facing another dark hour, but this time there are few financiers willing to save it. Morgan’s bank, now JPMorgan Chase, announced two weeks ago that it would no longer finance new coal-fired power plants in the United States or other wealthy nations. The retreat follows similar announcements by Bank of America, Citigroup and Morgan Stanley that they are, in one way or another, backing away from coal. While coal has been declining over the last several years, Wall Street’s broad retreat is an ominous sign for the industry. “There are always going to be periods of boom and bust,” said Chiza Vitta, a metals and mining analyst with the credit rating firm Standard & Poor’s. “But what is happening in coal is a downward shift that is permanent.”...more