Will Adani's Australian Coal Dream Come True
Here is all you need to know about Adani's Carmichael coal mine and rail project in the heart of Australia.
It took almost seven years for Adani to give a green flag to the $16.5 billion Carmichael coal mine and rail project in Australia. With the preconstruction of the project scheduled to begin from September this year, the battle forces of the authorities, angry environmentalist, politicians have horned their swords.
Let us first understand what the project is all about and why is it making news, for all the wrong reasons?
Calling it one of the single biggest investments by an Indian corporation in Australia, the coal mine, located in Queensland's Galilee Basin is the one, Adani laid its bets on seven years ago and announced to build Australia's largest coal mine, with a promise of generation of more than 11,000 direct and indirect jobs for the locals. Along with the mine, a 390 kilometres of the rail line is proposed to be built connecting the northern Galilee Basin to the Port of Abbot Point. Coal mined at the site will be sent to India via the waterfront coal terminal at this port.
Here comes the wrath of environmentalists and activists
The biggest problem is that this terminal is located on the coastline of Australia's crowning glory, 'The Great Barrier Reef'. Here come the furious environmentalists, who have been citing anger and concern as the coal exports would damage the reef and the emissions from the burning coal would have an adverse impact on the climate change. What's the whole point of Australia standing up for the Paris deal then? The project is expected to jeopardise the Australian tourism industry, with activists claiming 70,000 jobs associated with the reef, to be threatened.
'It's 700m tonnes of carbon dioxide into the atmosphere every year for over half a century'
Where will the money come from?
Now let's talk about the funding crisis. The cost of the project comes out to be $21.7 billion. Adani has applied for $900 million in loans under the federal government's independent Northern Australia Infrastructure Facility, which is not yet approved. The Government will need to pass changes to the Native Title Act and to make a decision on whether to provide a $1 billion concessional loan to the project, which is all funded by the taxpayers.
The activist and opposition has voiced strong opinions and pledged to stop the public money flow in financing this coal project and will consider all avenues, including legal action to stop it.
The Adani megamine has been given many of the approvals it needs. With the Federal government pledging $1bn of taxpayer dollars, they are not only going all in on coal, but fighting to kill renewables, and our hope for a safe future: STOPADANI campaign website.
Strangely, the company has not been able to secure funding since the inception of the deal. The banks are not willing to touch to this project with almost 23 banks distancing themselves publicly from the project or introduced policies that prohibit financing Adani's mine. The group has a net debt estimated at $2.5 billion and needs to raise $5 billion to finance the project, according to Environmental Finance group Market Forces.
At the times, when the world financiers are looking at the havens of renewables, why would they put their hands in the dirt of conventional energy, especially the project which is already under the hammer of the strong opposition and public brunt?
Will the argument of 11,000 jobs, save the project?
Highly doubtful! Though the Adani's claim that the project is bound to create more than 10,000 direct and indirect jobs for the locals, which is the main motivation for the government to fund the project, the opponents have challenged this claim. They say that the actual number of jobs would not be more than 1464. Where did this figure come from? The claim of 10,000 jobs was debunked by an economic expert, Jerome Fahrer from ACIL Allen Consulting, who told the Queensland Land Court:
"Over the life of the Project, it is projected that on average around 1,464 employee years of full-time equivalent direct and indirect jobs will be created".
Given the arguments, the critics have sworn to make all efforts to not let the project go ahead with the public money and more importantly the need to subsidise one of the most polluting coal-based projects. What is the point of creating pollution first to reap royalties and then investing the same money to do the damage control or may not? What if the damage was done is irrecoverable, argue the critics.
Why flood the world with cheap coal, flaws in our own thinking?
The opponents state that with the operation of this mine, the prices of the coal are bound to come down, flooding the world with the cheap supply of coal. They argue that with this the unsubsidised native mines in NSW (New South Wales) and QLD (Queensland) will be out of business, resulting in job losses.
India itself has announced plans to phase out thermal in the coming years and has laid down tremendous pressure on renewable energy. We have already witnessed the prices of solar and wind coming down below the conventional, becoming cheaper than the power from coal-fired plants.
Timeline: Gautam Adani's Carmichael coal mine project, Australia
November 2010: Adani Mining begins approval process to establish two new mines and a rail line in the Galilee Basin in north Queensland
May 2014: Queensland's Coordinator-General gave approval for the project to proceed. 190 conditions were set by the state during both construction and operations phases of the mine. Final approval rests with federal Environment Minister Greg Hunt
July 2014: Federal Minister for Environment, Greg Hunt gave approval for the mine to proceed
August 2015: Federal Court rules in favour of a legal challenge by Mackay Conservation Group which says Mr Hunt failed to take into account advice on the threatened yakka skink and ornamental snake
October 2015: The project is reapproved, subjected to "36 of the strictest conditions in Australian history"
May 2016: Queensland government approves mining leases for Adani
December 2016: Final Approval given. Adani announces the beginning of construction in June or July of 2017
May 2017: Controversy over the 'Royalty holiday' deal for adani. Queensland Labor was reportedly considering deferring the royalties that Adani would pay on coal extracted from the Galilee Basin, meaning the state would miss out on around $320 million. The caused a lot of stir within the government
In response, state cabinet agreed that Adani will pay all royalties it owes, including interest on any deferred payment.
June 6, 2017: The project is officially signed off by Gautam Adani. The pre-construction work to begin from September.
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