Adani Group Approves Massive Australian Carmichael Coal Mine
The long-proposed and highly unpopular Adani Carmichael coal mine in Australia’s northeast has been given the go-ahead by the Adani Group’s board.
The US$16 billion project was given the final go-ahead by the Adani Group’s board late Tuesday after months of delays and speculation that left the project in doubt. Most recently, the local state Queensland Government had held up the process amid uncertainty over royalties, not to mention significant resistance from campaigners. Now, after nearly seven years, Adani has the approval both from the State and its own board to proceed, and pre-construction work may begin as early as next month.
“We have been challenged by activists in the courts, in inner city streets, and even outside banks that have not even been approached to finance the project,” said Chairman Gautam Adani in a statement. “We are still facing activists. But we are committed to this project. We are committed to regional Queensland and we are committed to addressing energy poverty in India.”
The State of Queensland approved the mining leases for the AU$21.7 billion project earlier this month, in a move that the state’s politicians hopes will create thousands of new jobs. Specifically, Adani has estimated that the mine, rail, and port project could together generate more than 5,000 jobs at the peak of construction, and more than 4,500 jobs at the peak of operations.
“I know the people of north and central Queensland will welcome this latest progress for the potential jobs and economic development it brings closer for their communities,” said Queensland Premier Annastascia Palaszczuk. “At the same time, stringent conditions will continue to protect the environment, landholders’ and traditional owners’ interests, and our iconic Great Barrier Reef.”
These “stringent conditions” however appear to be missing the point entirely. Minister for State Development and Minister for Natural Resources and Mines Dr Anthony Lynham explained that, “The mine’s environmental authority had about 140 conditions to protect local flora and fauna, groundwater and surface water resources, as well as controls on dust and noise. “A further 99 stringent and wide-ranging conditions apply to the rail and port elements of the project.”
All of that is great, except that the overarching issue isn’t with protecting the local flora and fauna, but with the wasteful mining of coal that will likely not be used, and the tremendous increase in emissions created by the coal that is used. Explanations that the Carmichael coal mine will help stave off energy poverty for Indians is a pipedream. Not only did a recent Oxfam report find that increasing the number of coal mines will only increase the level of global poverty, but the coal that will be mined at Carmichael may not even be necessary or desired by the time mining operations begin in 2020.
A report published earlier this year by the Institute for Energy Economics and Financial Analysis (IEEFA) concluded, among other things, that shifting energy policy and pricing in India are likely to see the Carmichael mine quickly become a stranded asset. Put this alongside news we reported back in February that Indian coal imports declined in January, and the growing reliance upon renewable energy deployment over fossil fuels, and the absurdity of the Carmichael mine quickly becomes more and more apparent.
Reacting to the announcement that Adani is planning to proceed with the mine’s development, IEEFA director of energy finance studies, Australiasia, Tim Buckley railed against the decision.
“An internal investment decision for the Carmichael mine is very different to an externally legally binding financial close. This proposal is still a pipe dream.”
“Today’s investment decision from Adani Enterprises Ltd (AEL) is all part of the theatrics to securing a proposed $A900 million subsidy from the Northern Australia Infrastructure Facility (NAIF) in addition to a $370 million royalty holiday from the Queensland government, and to pressure the federal government to change legislation so as to overrule the W&J Traditional Owner rights.”
“Adani is still far from being able to proceed with this much-delayed $5 billion project proposal. Adani Enterprise Ltd. simply does not have the capital available to fund the project. Adani Mining Pty Ltd (Australia) has negative $230m shareholders’ funds and net debts of A$1,478m as of March 31, 2017.”
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