The world cannot afford Adani's coal mine

What is the Adani Project?

About Adani, the Galilee Basin, the Carmichael coalmine and Abbot Point

Why is this a bad idea?

Let me count the ways . . . 

What is the Adani Project?

The Adani Group is a network of family-controlled companies headed by Indian billionaire Gautam Adani. Its businesses span coal trading, coal mining, oil and gas exploration, ports, multi-modal logistics, power generation, and transmission and gas distribution. It controls the majority of coal imports into India. It owns the Abbot Point Coal Terminal near Townsville as well as many ports in India. Adani Power is the largest private energy producer in India (9,280MW).

For some years Adani has been seeking to open up a massive coal mine - the Carmichael Mine - in the Galilee Basin, west of Rockhampton.

The Galilee Basin is a vast geological basin covering about 250,000 km2 in central Queensland. The Basin straddles the Great Dividing Range with rivers on its north-eastern margin flowing to the Coral Sea (Great Barrier Reef) and those in the west and south flowing inland to Lake Eyre. The Great Artesian Basin underlies most of the Galilee Basin and beneath it lie huge coal deposits laid down when Australia was part of Gondwana.

Operation of the mine would require an extension of a railway line to link it to the Abbot Point coal terminal.

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Why is this a BAD idea? 


Greenhouse gas emissions

The Paris Climate conference recognised that there is a limited carbon budget left: the amount of coal that the world can afford to burn if we wish to stay within 2ºC global warming. Existing coal mines around the world can already supply more than that, without developing any new mines.

Coal from the Carmichael mine, once burnt, would send 79 million tonnes of CO2 into the atmosphere every year - seven times the abatement purchased by the federal government in its April 2017 Emissions Reduction Fund reverse auction

Over its lifetime, according to the federal Environment Department's own figures, it will emit an astonishing 4.7 billion tonnes into the atmosphere. Put another way, total emissions associated with that one mine would be equivalent to nine times Australia's total overall emissions in 2014.

It is argued that if we don't supply the coal, Adani will source it elsewhere, and that the Carmichael coal is cleaner than alternatives - though that point is disputed.  Carmichael coal has a lower energy content than the Australian average, and a higher ash content. Other sources (e.g. Russia, Indonesia) can provide more efficient coal. Although Carmichael coal would be marginally cleaner than Indian coal, the emissions from transporting it 5-10 times as far would need to be counted against any reduction when the coal is burnt.

Last month, Malcolm Turnbull was asked in the Australian Parliament about his government's support for the Adani mine. He said stopping the mine "would be no benefit to the global climate whatsoever, because if our coal exports stopped, they would simply be sourced from other countries".

This is the familiar "drug dealers' defence" and is no excuse whatsoever.

We should demand that other countries take climate change seriously too - and we should note that Adani is also in the business of solar energy, which is now proving to be cheaper to install in India than new coal-fired power stations.

Of course, the idea that mining or burning coal anywhere can make a positive contribution to the world's efforts to reduce emissions is absurd.

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But wait,there's more . .

The Carmichael project is just one of six mines proposed for the Galilee Basin in Queensland. If opened for mining it signals that climate change is not to be tackled seriously. If protected, it signals the beginning of the end of the coal era.(more).

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The Great Barrier Reef

The oceans are warming, and this is already killing off the Great Barrier Reef - one of the seven great wonders of the natural world. Extensive aerial and dive surveys have revealed 93% of the reef has been impacted by bleaching, an unprecedented level of destruction. Then there is the dredging near the Great Barrier Reef Marine Park off Bowen, and the constant traffic of coal carriers through the waters adjacent to the Reef

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 Coal kills now>

Coal kills more than just coral. Coal mines are a health risk for miners, workers and local communities: they cause higher rates of childhood asthma, heart and lung disease, and some cancers (ref). In this country workers are dying of black lung disease and in the Adani corporation's India more than 100,000 people die of the polluting effects of burning fossil fuels every year. (more)

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 Climate change will kill in the future

In the longer term, climate change will have a serious impact on human health. A recent article in The Lancet argues that up to now "global health has mainly improved as these changes have gathered pace. The explanation is straightforward and sobering: we have been mortgaging the health of future generations to realise economic and development gains in the present. By unsustainably exploiting nature's resources, human civilisation has flourished but now risks substantial health effects from the degradation of nature's life support systems in the future."

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 Australia's Emission Reduction Targets

Coal that is mined in Australia, but burnt elsewhere is not counted towards Australian emissions. Bizarrely, Australia could stop all coal exports tomorrow, and be no closer to the reduction targets it took to the Paris conference. But despite the government's complacency about its own inadequate efforts to reach inadequate targets, that is no excuse for mining or exporting coal and expecting other countries to find reductions elsewhere.

Clearing the land for the mine itself - an area equivalent to Queensland's Moreton Island - will also likely reduce local rainfall considerably, as well as the land's ability to re-absorb carbon.

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 Indigenous rights

The Queensland government has declared the Carmichael mine to be a "critical infrastructure project". This allows many laws and processes which would normally protect the interests of those affected, to be ignored. Among these, traditional indigenous land rights are being whittled away.

The Wangan and Jagalingou Traditional Owners Council say the mine will "tear the heart out" of their ancestral lands, and they remain resolute in saying no to a land deal with Adani and the state. These challenges sit outside the current powers of the Coordinator General and are at the intersection of Australia's native title system and the rights of Indigenous peoples under international law and conventions. (more)

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 Water

According to an environmental impact statement, the mine will draw 26 million litres of water per day from its pits by 2029 as it ramps out annual production to as much as 60 million tonnes. Over its life, the mine's water tally would reach an estimated 355 billion litres. (more). This will significantly reduce water flow in the Carmichael river system.

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 Adani's record

"This isn't a company that has a chequered past, or a slightly blemished record. This is a company which has proven itself corrupt, destructive and deceitful to its core." (more).

Adani uses dodgy tax havens in the Cayman Islands to hide assets and revenue. 13 of the 26 Adani subsidiaries registered in Australia are ultimately owned in the Cayman Islands. Companies who pay their taxes don't register themselves in the Cayman Islands.  

The Adani Group, is infamous for environmental destruction and other illegal activity. The company's unscrupulous activities in India have been aired in a number of government investigations and court hearings in India. They include bribery, illegal exports, building on private villagers' land, and destroying a conservation area.

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 The revolving door

Adani's communications director in Australia is Andrew Porter, a former staffer for Bill Shorten, Julia Gillard and Kevin Rudd. Adani has also hired at least two staffers who worked for former LNP deputy premier of Queensland, Jeff Seeney. 

Does this help to explain the apparent enthusiasm that both sides of politics, at both state and federal levels, appear to have for the project, despite so many arguments against it?

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 Employment

The Queensland ALP government's main argument in favour of the Adani coal mine is the employment it would bring to North Queensland. What are the numbers?

At present the coal industry currently provides only 20,000 jobs in Queensland, a mere 1% of the workforce of about two million. The industry provides only 4% of the Queensland government's revenue, roughly the same as car registration

Adani has claimed the mine and related operations will generate 10,000 jobs. However in the Land Court of Queensland, Adani's own expert witness, Dr Jerome Fahrer of ACIL Allen, said that Adani's mine and rail operations would employ around 1,800 people directly and create around 1,000 downstream jobs in "other services". But at the same time, the project would reduce employment in agriculture, manufacturing and other mining projects by around 1,400 jobs, leaving a net gain of about 1,400 jobs. (more)

Is it worth it? Compare those 1,400 jobs to the roughly 69,000 jobs (in tourism, commercial fishing and research) estimated by Deloitte Access Economics to be generated annually by the Great Barrier Reef, many of which would be at risk if the Great Barrier Reef continues to deteriorate - whether due to the pollution caused by coal shipping, or to ocean warming.

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 Financial risk

There is rapidly growing agreement all around the world that coal is "finished" as an industry - and therefore as an investment.

Since buying the coal tenements from Linc Energy in 2010, Adani has failed to secure a single private backer for the Carmichael mine. 

In fact, since then, 17 banks have either publicly distanced themselves from Galilee Basin coal export projects or introduced policies that prevent them lending to the Carmichael mine. 

Last year, ANZ signalled that funding Carmichael wouldn't square with their intent to scale down coal mining exposure. CBA walked away from their advisory mandate on the Carmichael mine in 2015 and later that year, NAB just ruled it out. Westpac, however, has remained silent on whether they would finance the mine.

Why would Adani persist with the project in the face of such pessimism? The answer is that, increasingly, large, government-supported projects, particularly in coal mining, do fail. Often the operating company declares itself bankrupt, and unable to remediate the mining sites as they would normally be contracted to do. But the ultimate owners of the company have salted their profits away in unreachable tax havens.

The government has made one billion dollars available as a loan to extend the rail link between Carmichael and Abbot Point. What chance is there that this loan will never be repaid?

Already there are concerns that money from private investors in the Carmichael project has been shifted to a Cayman Island subsidiary, which will in turn reinvest it in the railway, against guaranteed earnings (which will come before any money flows to other investors). (more).

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 In short

It's a dud.

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