MELBOURNE (Reuters) – Australia’s Resources Minister has offered to set up a government-run A $ 250 billion ($ 180 billion) loan facility for the country’s coal industry in return for support from a target of net zero carbon emissions for 2050, he said on Thursday.

Resources Minister Keith Pitt, member of the National Party, junior coalition partner, told the Australian Financial Review his idea was for the government to be the mining sector’s “lender of last resort” as banks and insurers are less and less willing to finance and underwrite. Industry.

Prime Minister Scott Morrison has come under increasing pressure to adopt a zero emissions target, but has been blocked by opposition from the party’s junior partner. Pitt’s proposal is a first sign of what that support could cost.

Morrison said on Thursday he would brief his government’s position on reducing emissions before heading to the COP26 conference in Glasgow, but it is unclear whether he will attend the global climate meeting. Participants were invited to come up with ambitious emission reduction targets.

The loan facility proposal was not a policy of the National Party, which represents rural Australians for whom jobs in coal-producing areas are a major concern, but it was under discussion, Nationals chief Barnaby said. Joyce, at ABC Radio.

“Whatever happens, we have to find a way to fund the resource sector and provide insurance,” Pitt told the Australian Financial Review.

Pitt also said the agriculture and resource sector should be left out of any sacrifice in terms of reaching net zero, according to Thursday’s AFR report.

“If we are to take care of 300,000 jobs, provide electricity to 70% of homes, the Australian government will have to become the lender of last resort,” he said, according to the newspaper.

Australia’s coal industry suffers from limited access to finance and insurance, increasing the costs of doing business and threatening the longevity of an industry that represents the country’s second most valuable exports, submissions to an investigation have shown parliamentarian in May.

Pitt said last month that coal would be a major contributor to Australia’s economy well beyond 2030 given growing global demand, after a United Nations envoy called on the country to phase out fossil fuels.

($ 1 = AU $ 1.3732)

(Reporting by Melanie Burton; Editing by Tom Hogue)

Copyright 2021 Thomson Reuters.

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