What’s next for the coal mine that helped to return Morrison to power?
It's been a byword for division but, post-election, moves are speeding up to approve Adani's Carmichael coal mine in Queensland. How did we get here and what's next?
Normal text sizeLarger text sizeVery large text size
Adani's proposed mine in Queensland has long been a lightning rod for division over coal-mining and climate change in Australia. It is also being named as a big reason for Labor's lost seats in Queensland amid the Morrison government's upset re-election.
Now Queensland's Premier says everyone's "had a gutful" of the issue – and she wants it sorted out.
“I am expecting a definite timeframe by Friday,” Premier Palaszczuk said on May 22.
So what's next for this controversial project and what are the implications of it finally going ahead?
First, what exactly is the project?
The Carmichael mine, named after a nearby river, is the most viable of nine coal projects earmarked for the Galilee Basin. The basin is about the size of Victoria and contains one of the world's largest untapped deposits of thermal coal – the type used to make electricity. The mine, which is proposed by Adani Mining (a subsidiary of India's Adani Group), is meant to be a keystone project for the Indian company's so-called "pit-to-plug" strategy of owning coal mines to feed its power plants in India.
Adani also runs ports in India and has other interests, including renewable energy. Its chairman and founder, Gautam Adani, was the 10th richest Indian in 2018, worth $17 billion ($US11.9 billion), Forbes reported.
Queensland is no stranger to coal mining, of course. The Bowen Basin, which runs along eastern Queensland into NSW, contains about two-thirds of the state's coal reserve, including the higher value (and harder to substitute) coking coal, used in steel making.
Still, the nearby Galilee's "greenfield" nature is attractive for new entrants. Beyond Adani, other billionaires are in the mix, with Gina Rinehart backing GVK's proposed mine and would-be senator Clive Palmer seeking to advance his Waratah Coal venture.
If all nine proposed Galilee ventures get going, output could climb to 320 million tonnes of coal a year. That's equivalent to expanding global seaborne coal trade by a third, says Tim Buckley, a director of the Institute of Energy Economics and Financial Analysis (IEEFA).
Galilee coal has a relatively high ash and low energy content for Australian coal, he says. The mining industry, though, says Galilee coal is up to 5800 kilocalories per kilogram, better than an average Indian energy content of as much as 4600 kcal/kg.
The Climate Council estimates those mines could lead to an additional 705 million tonnes of carbon dioxide emitted per year when the coal is burnt. That amount of pollution is equivalent to 1.3 times the annual emissions of Australia – although how much is additional depends on the amount by which total coal use increases rather than Galilee bumping other suppliers out of the market.
Mr Adani plans to ship coal from the Galilee Basin to India, where his companies make up the largest private electricity supplier led by the "ultra mega" Mundra power plant, with more than 4000 MW capacity. Adani is betting on forecasts, such as by BP, that India's power demand will roughly triple between 2017 and 2040.
The Queensland Resources Council notes International Energy Agency estimates point to India's coal-fired power plant capacity doubling by 2040.
How many jobs would the Adani mine create?
Adani says it will generate more than 1500 direct jobs on the mine and rail project – which would transport the coal 200 kilometres to another rail line, from where it would go to Queensland's northern-most coal port, Abbot Point – with about 6750 indirect jobs in towns such as Rockhampton, Townsville, Mackay and the Isaac region.
The project's economic impact would be multiplied if other Galilee mines open up.
But the Australia Institute, an opponent of the Carmichael Mine, has noted how industry analysts expect Galilee coal to displace demand for coal elsewhere in Australia. It says Galilee Basin output of 150 million tonnes a year would cut coal volumes from the NSW Hunter Valley by 116 million tonnes by 2035 – something the minerals lobby has typically had little to say about.
What's been the hold-up?
Adani paid $500 million plus a future coal royalty stream in 2010 to the now disgraced Linc Energy for its Carmichael coal tenements of some 2.3 billion tonnes of coal. The following year it promised to start coal production from 2014.
Adani failed to find banks willing to support its plan for the $16.5 billion "mega mine" that would have produced as much as 60 million tonnes of coal a year. It also hit a series of regulatory and legal challenges, both at the state and federal level, and the project is now a smaller first-stage version that Adani will fund itself at $2 billion.
The April 9 environmental approval by federal Environment Minister Melissa Price – just days before the election was called – removed one key barrier to the project.
But there are still 15 plans needing federal approvals, eight of which require the nod before the mine's operations can begin.
Adani's not done with the courts either. Its lawyers are fending off appeals against the mine by the Wangan and Jagalingou Traditional Owners Council, which will be heard in the Federal Court on May 27 and 28.
And the Environmental Defenders Office in Queensland has hearing dates set for June 27-28 for its challenge – on behalf of the Australian Conservation Foundation – of Minister Price's handling of the approval process for the North Galilee Water Scheme, which is meant to funnel 12.5 billion litres of water along a 110-kilometre pipeline to the Adani and other mines from the Suttor River.
What's happening now?
The blowtorch for approval is firmly turned on Annastacia Palaszczuk's Queensland Labor government.
Queensland has granted Adani most of what it needs to start building the mine, such as approving a water licence that grants the Adani mine unlimited access to groundwater for 60 years.
On May 22, Premier Palaszczuk intervened to ask the Coordinator-General to have Adani chief Lucas Dow meet the following day with the environmental authority to set firm timelines for resolving the remaining issues of groundwater and biodiversity impacts. Those timelines will be released the day after that meeting.
Everyone's had a gutful of this, frankly.
"I think the community is fed up with the [approval] process," she told a media event at the coal port of Hay Point.
"Everyone's had a gutful of this, frankly," adding that the weekend's election rout in her state for Labor "was definitely a wake-up for everyone".
By contrast, earlier this week, Leeanne Enoch, Queensland's environment minister, was holding to a line her government had used for months.
"Environmental approvals are necessary for all major projects. The Department of Environment and Science, as the regulator, are continuing to progress through the necessary processes," she said. "These decisions are made free of political interference."
What do groundwater and springs have to do with it?
Two key management plans are yet to get the tick from Queensland's independent environment authority – and the Queensland Premier has now put them under extra pressure to decide.
One of them relates to the Carmichael mine's impact on water at the nationally significant Doongmabulla Springs, a wetland desert oasis about 11 kilometres from the mine.
The concern is the mine could contaminate or disrupt the aquifers supplying the springs.
The concern is the mine could contaminate or disrupt the aquifers supplying the springs. The state government notes that CSIRO and Geoscience Australia both raised concerns about the groundwater impacts. (The state government had been asking their federal counterparts for the CSIRO report for a month – only to receive it less than half an hour before Minister Price announced her approval.)
Groundwater is the water that seeps into cracks below the Earth's surface – and which can become contaminated. In Australia, such supplies account for nearly a third of our total water consumption, according to Geoscience Australia. Competitors for the water to be used by the Adani mine include local towns and the region's farmers.
Queensland's environment authority wants Adani to demonstrate the sources of the Doongmabulla Springs, and show how its mine will affect them.
And what about those finches?
The second remaining plan awaiting approval – and which has also been given the hurry up – is the mine's impact on fauna such as the endangered black-throated finch, a tiny bird that has not been seen in NSW since the '90s as its habitat has been steadily cleared. Adani's detailing of the mine's impact on the finches has so far been deemed inadequate.
And there's a rail link still being debated too?
The original 388-kilometre tracks planned to connect the mine to Adani's Abbot Point coal terminal has been ditched by Adani in favour of the cheaper option of a 200-kilometre spur to join Aurizon's network near Moranbah, in Central Queensland.
It is understood Aurizon has up to 12 months to assess the proposal it received from Adani last November – and is in no hurry.
Aurizon said it Read More – Source