Bank of America to Phase Out MTR Financing
Bank of America (BAC) has announced plans to begin phasing out its financing of mining companies primarily engaged in mountain-top removal (MTR) coal extraction, as stated on its Coal Policy Statement. Mining companies rely on credit lines from banks to support their operations and finance new projects. MTR is an ecologically destructive mining practice where the tops of mountains are blasted away to expose seams of coal. The resulting rubble is usually dumped in adjacent stream beds, where it buries and contaminates the water and can lead to flooding and mudslides. Deforestation and toxic tailings ponds are additional problems.
MMA has been in dialog with BAC on this issue for over a year, and co-filed a resolution with other institutions seeking to phase out the company’s financing of MTR mining companies and new coal-fired power plants. MMA then took part in conference calls and an in-person meeting with BAC managing directors, which culminated in BAC joining the Carbon Principles. While BAC looks to be beginning its phaseout of MTR funding, progress will be gradual and the company is still involved in financing other new coal operations, even though clean coal technology is not yet viable.
As one of the three major US banks likely to remain standing through the end of the financial crisis, BAC will have even more power and influence in the financial sector in coming years. If the company phases out its funding of the worst mining practices and supports cleaner forms of energy, it can have a positive effect on the lending practices of the larger financial sector. MMA supports BAC’s progress, and will continue to monitor and encourage greater change.
