Letter to the Prime Minister of Singapore
Mr. Juan Tamayo,
We are currently in the midst of a US-based campaign demanding UBS AG change their official policy and stop financing, supporting and advising companies that engage in what is known as mountaintop removal coal mining.
What is Mountaintop Removal Coal Mining [MTR]?
Mountaintop removal is a relatively new type of coal mining that began in Appalachia in the 1970s as an extension of conventional strip mining techniques. Primarily, mountaintop removal is occurring in West Virginia, Kentucky, Virginia and Tennessee. Coal companies in Appalachia are increasingly using this method because it allows for almost complete recovery of coal seams while reducing the number of workers required to a fraction of what conventional methods require.
The US Environmental Protection Agency defines mountaintop removal as follows:
“Mountaintop removal/valley fill is a mining practice where the tops of mountains are removed, exposing the seams of coal. Mountaintop removal can involve removing 500 feet or more of the summit to get at buried seams of coal. The earth from the mountaintop is then dumped in the neighboring valleys.”
How is UBS involved with MTR?
UBS funds and supports all companies engaged in Mountaintop Removal Coal Mining in Southern Appalachia; Patriot Coal Corporation, Alpha Natural Resources, Arch Coal Inc and James River Coal Company.
In 2010, UBS stated “[UBS] needs to be satisfied that the client is committed to reduce over time its exposure to [MTR],” that same year, UBS acted as a paid adviser in the merger of Massey Energy and Alpha Natural Resources. This merger created the largest single MTR company in the country, now responsible for some 25 percent of coal production from MTR mines.”
In 2011 UBS issued their annual report stating, “In 2010, we decided to further strengthen our environmental and social risk management (including human rights) by identifying controversial activities where we will not do business, or only do business under stringent pre-established guidelines. Therefore we will not knowingly provide financial services to corporate clients, nor will we purchase goods or services from suppliers, where the use of proceeds, primary business activity, or acquisition target involves the following environmental and social risks: Extractive industries, heavy infrastructure, forestry and plantations operations that risk severe environmental damage. . .” [Page 62]
Despite this statement, the company continued to fund and support companies engaging in harmful extractive practices in Southern Appalachia, as detailed here:
Bond and Loan Deals – MTR, Coal Plant and Coal Export Companies
Jan 1, 2010 through March 14, 2012
Research sourced from Bloomberg, by Annie Sartor
March 28, 2012
UBS has documented financial relationships with 4 of the top 9 MTR coal mining companies
Alpha Natural Resources
• 11/8/10 – UBS Securities served as sole arranger and UBS Loan Finance LLC served as swingline lender
for AT Massey Coal Company’s second amended and restated credit agreement
• 3/16/10 – UBS Securities LLC underwrote $50 million for International Coal Group’s $100 bond offering
• 8/9/10 – UBS Securities LLC underwrote $7.5 million for Arch Coal’s $500 million bond offering
James River Coal Company
• 1/28/10, 8/16/10, 10/29/10, 3/6/11, 4/15/11, 6/30/11 – UBS Loan Finance LLC and UBS AG, Stamford
Branch served as lenders for 6 amendments and restatements to James River Coal Company’s revolving
credit agreement worth $100 million (loan)
• 3/29/11 – UBS Securities LLC served as joint lead manager – books for James River Coal Co’s $230 million
• 10/13/11 – UBS Securities LLC served as lead manager for James River Coal Co’s offer to exchange $270
million in notes
• 1/6/11 and 1/31/12 – UBS Loan Finance LLC served as a lender on amendment number 1 and the
Second Amendment to Patriot Coal’s amended and restated credit agreement
Who are we?
We are a independent group of Southern Appalachian residents & activists opposing the practice of mountaintop removal coal mining, organized as The Knoxville Activist Collective. We are affiliated with Mountain Justice. (http://mountainjustice.org/)
We will apply enough public pressure to ensure that UBS changes their official policy and stops funding and supporting companies that engage in mountaintop removal.