Adani's Carmichael coal mine project
Who and what is Adani?
A multinational company based in Ahmedabad, India, Adani Group builds and operates mines, ports and power plants. The company has operations in coal, gas and renewable energy across India, Indonesia and Australia. [1]
Adani paid half-a-billion-dollars for the Carmichael Coal tenement, so named after a river in the vicinity, in 2010. The mine will supply Indian power plants with enough coal to generate electricity for up to 100 million people. It is 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. Coal from the mine will be processed through the Abbot Point Coal Terminal, off the coast of Bowen in north Queensland. It originally planned to have the mine up and running four years ago.
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 adjacent 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. Some nine projects are proposed in the Galilee basin, which if all were fully developed, could produce an output of up to 320 million tonnes of coal a year. The basin's distance from the coast and its moderate quality are key reasons why the region's coal hasn't been dug up before now.
Galilee coal has a relatively high ash and low energy content for Australian coal of up to 5800 kilocalories per kilogram, far 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, but how much is additional depends on the amount by which total coal use increases rather than Galilee superseding other suppliers out of the market. [2]
Why is Adani’s Carmichael mine significant?
The Adani coal mine highlights the political divide on climate change in Australia, between those favouring economic development and jobs growth, and those advocating environmental considerations.
Those opposed
The project has become a touchstone for an environmental movement trying to stop new thermal coal mines. It is argued that there are enough carbon emissions from existing fossil fuel projects to blow the world's "carbon budget" to keep average temperature rises above 2 degrees Celsius. The Carmichael mine, they say, is the thin edge of the wedge. Adani would blaze a trail for some nine other mining prospective mines in Queensland's Galilee Basin, which contains enough coal to outstrip Australia's annual carbon emissions if it was all burned.
Adani was in fact fined in March 2019 after stormwater with double the restricted debris levels was released from the Abbot Point coal port the previous month and into nearby wetlands in north Queensland.
Those in favour
Project supporters say local benefits, jobs and property booms from mining income would otherwise go overseas. Asia will get its coal from somewhere else, they say, so the argument is better it be regional Queensland where, in an economy still reeling from the end of the mining boom, Adani has become a symbol of hope.
Adani has survived numerous legal challenges in court while striving for nine years to get the most-scrutinised coal project in modern Australian history over the line. Over the six years prior to April 2017, there were more than 10 appeals and judicial processes.
Other environmental concerns
The mine could potentially drain dry the nationally important Doongmabulla Springs, regarded as one of the world’s last pristine desert oases, and deprive the black-throated finch of habitat critical to its survival. The concern is that the mine could contaminate or disrupt the aquifers supplying the springs.[3]
A multinational company based in Ahmedabad, India, Adani Group builds and operates mines, ports and power plants. The company has operations in coal, gas and renewable energy across India, Indonesia and Australia. [1]
Adani paid half-a-billion-dollars for the Carmichael Coal tenement, so named after a river in the vicinity, in 2010. The mine will supply Indian power plants with enough coal to generate electricity for up to 100 million people. It is 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. Coal from the mine will be processed through the Abbot Point Coal Terminal, off the coast of Bowen in north Queensland. It originally planned to have the mine up and running four years ago.
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 adjacent 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. Some nine projects are proposed in the Galilee basin, which if all were fully developed, could produce an output of up to 320 million tonnes of coal a year. The basin's distance from the coast and its moderate quality are key reasons why the region's coal hasn't been dug up before now.
Galilee coal has a relatively high ash and low energy content for Australian coal of up to 5800 kilocalories per kilogram, far 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, but how much is additional depends on the amount by which total coal use increases rather than Galilee superseding other suppliers out of the market. [2]
Why is Adani’s Carmichael mine significant?
The Adani coal mine highlights the political divide on climate change in Australia, between those favouring economic development and jobs growth, and those advocating environmental considerations.
Those opposed
The project has become a touchstone for an environmental movement trying to stop new thermal coal mines. It is argued that there are enough carbon emissions from existing fossil fuel projects to blow the world's "carbon budget" to keep average temperature rises above 2 degrees Celsius. The Carmichael mine, they say, is the thin edge of the wedge. Adani would blaze a trail for some nine other mining prospective mines in Queensland's Galilee Basin, which contains enough coal to outstrip Australia's annual carbon emissions if it was all burned.
Adani was in fact fined in March 2019 after stormwater with double the restricted debris levels was released from the Abbot Point coal port the previous month and into nearby wetlands in north Queensland.
Those in favour
Project supporters say local benefits, jobs and property booms from mining income would otherwise go overseas. Asia will get its coal from somewhere else, they say, so the argument is better it be regional Queensland where, in an economy still reeling from the end of the mining boom, Adani has become a symbol of hope.
Adani has survived numerous legal challenges in court while striving for nine years to get the most-scrutinised coal project in modern Australian history over the line. Over the six years prior to April 2017, there were more than 10 appeals and judicial processes.
Other environmental concerns
The mine could potentially drain dry the nationally important Doongmabulla Springs, regarded as one of the world’s last pristine desert oases, and deprive the black-throated finch of habitat critical to its survival. The concern is that the mine could contaminate or disrupt the aquifers supplying the springs.[3]
- Facts and figures
Original proposal: a 60-million-tonne-a-year mega-mine
Current proposal: a 10-to-15MT-a-year proposition, with the option of ramping up to 27 MT. Would still be one of the biggest coal mines in Australia on a par with the country's largest existing thermal coal operations:
- BHP Billiton's Mount Arthur Mine — 15MT — in NSW and
- BMA's Blackwater mine in Queensland — 13MT — but which also includes coal for steelmaking.
Original rail line proposal linking the mine to its Abbot Point coal port: 388km,
Present proposal: a smaller, narrow gauge rail line 200 km long to connect to the existing Aurizon network, rather than building an entirely new rail corridor to the Abbot Point terminal, Queensland's northernmost coal port.
Original project cost: $16.5 billion over its lifetime.
Projected present mine component cost: $2 billion.
Mine’s estimated life span: between 25 and 60 years.
Jobs, taxes and royalties
- Original jobs generated estimate: 10,000 jobs, direct and indirect, at its peak from 2024, according to one form of modelling; $22 billion to be generated in taxes and royalties.
- In court in 2015, its economics expert said instead it would create an extra 1,464 jobs in Australia, 1,206 of them in Queensland, and generate $16.8 billion in taxes and royalties. This was accepted by the Court. Adani now speaks of more than 1,500 direct jobs on the mine and rail project with about 6750 indirect jobs on town such as Rockhampton, Townsville, Mackay and the Isaac region. However, it is projected by other sources that the Galilee basin's output of 150 million tonnes a year would cut coal volumes in the NSW Hunter Valley by 116 million tonnes by 2035.[3]
- With the revised mine plan now possibly less than a quarter of its original scale, no new projection has yet appeared for jobs or tax and royalty streams.
- Adani is yet to reach a final deal with the State Government on how its royalty payments might be deferred in the mine's first five years.
Funding
- By Adani: says it can "self-fund" the smaller project, after previously seeking finance from Asian banks without success, amid lobbying by anti-mining activists.
- Queensland Premier Annastacia Palaszczuk killed off its chances of a $1 billion taxpayer-funded loan for its railway in 2017.
The state of play in 2019
- Adani has mining and environmental licences from the Queensland Government but it still needs the state to sign off on two environmental management plans — one for the black-throated finch and one for groundwater, the water that seeps into cracks below the earth's surface, which can become contaminated, competitors for which include local towns and the region's farmers.. The Queensland Government has approved a water licence that grants the Adani mine unlimited access to groundwater for 60 years.[3]
- However, as regards the latter, Adani requires a groundwater dependent ecosystem management plan before it can start the mine’s construction. Adani’s draft groundwater plans have to date been deemed deficient at various times by those with expertise in the field, and, depending on what happens with Adani, there are up to 9 other proposed coal mines proposed in the Galilee Basin.
- The impact the mine on water resources in the Basin is one thing. The potentially imperilled survival of 187 ancient Great Artesian Basin springs and their associated wetlands is another. The springs constitute an intricate network, which provides permanent water in a very dry landscape for local wildlife and graziers.
- According to a multi-million dollar bioregional assessment process commissioned by the Federal Government and released in 2018, if these springs are damaged, they could dry up permanently, there being “no superglue exists that allows them to be repaired”.
- The study concluded the cumulative water impacts of seven of the proposed developments in the Basin would likely affect up to 6,285 kilometres of Queensland streams, and groundwater across 1.4 million hectares and that the cumulative impacts of these mines on water would be significant.
- The report also contained vital information about the likely damage these mines would wreak on the ancient Great Artesian Basin spring wetlands, the bioregional assessment predicting that there is a 5% chance that 120 springs in this complex will experience drawdown in excess of 2 metres in (a particular aquifer known as) the Clematis Group aquifer.”
- Despite all this, The Federal Environment Minister approved Adani’s groundwater plan on the eve of the Morrison Government assuming caretaker mode just before the 2019 Federal election. The Minister is reported to have been pressured into signing off on the plan by Queensland Coalition MPs.
- It was anticipated that the Queensland Government would hold Adani to a different standard on groundwater:
o Queensland Environment Minister Leanne Enoch had said Adani must "definitively" identify the source aquifers of the Doongmabulla Springs, regarded as one of the world’s last pristine desert oases.
o Ms Enoch said according to her department, the advice to Ms Price from federal agencies the CSIRO and GeoScience Australia was that Adani had not. o .The decisions on both plans will be in the hands of the State Environment Department. |
- However, following Labor’s disappointing result in the Federal election, on 22 May 2019, Queensland’s Labor Premier Annastacia Palaszczuk has asked the two parties, Adani and the independent regulator, the Department of Environment and Science (DES) to sit down “tomorrow” with the Coordinator-General, saying both she and the community were "fed up" with waiting for the department to approve the Indian mining company's environmental management plans.
Soon thereafter, Queensland's Environment Department granted approval for the mine's conservation plan for the endangered black-throated finch and days later its groundwater management plan.
Other roadblocks
Native Title
- Adani also needs the Queensland Government to extinguish the native title claims of the Wangan and Jagalingou (W&J) people to the mine site. It can then take up a freehold lease and start digging. Before the election, the Palaszczuk Government indicated it wouldn’t be rushing to make that happen. It would wait at least until Adani opponents within the W&J exhaust their legal avenue of appeal in the Federal Court.
- The traditional owners of the mine site are bitterly opposed on the project. A hearing is set down for next month (June) and a decision on whether a crucial land-use agreement with the miner should stand is likely months away. Adani supporters in the W&J maintain they have the numbers.
- The anti-Adani contingent in the W&J, who describe themselves as the last line of resistance to the mine, have flagged taking their fight to the High Court.
- It's not clear if the State would wait for that outcome; most of the critical levers on the Adani project remain in the Palaszczuk Government's hands.
More differences of opinion
- The Australian Conservation Foundation is also challenging in the Federal Court Ms Price's decision not to apply "water trigger" assessment over a water-pipeline project proposed by Adani, which is intended to funnel 12.5 billion litres of water a year along a 110 kilometre pipeline to the Adani and other mines from the Sutter River. [3]
- The Queensland Environment Minister has claimed the Federal Minister’s environmental approval on election eve "reeks of political interference" from Adani's supporters in the Coalition, which "may have compromised the integrity of the decision-making process".
- Notwithstanding her environmental approval, the Federal Minister has noted the project must meet further conditions of approval from the Commonwealth before it can commence to dig. There are said to be still (May 2019) 15 plans needing Federal approvals, of which 8 are needed to pass before the mine's operations can begin. [3]
Other developments
In May 2019, MacMines Austasia, a 100 per cent subsidiary of the Meijin Energy Group, which claims to be China's top metallurgical coke producer, the owner of the proposed China Stone open-cut and underground thermal coal mine, just 30 kilometres from Adani, chose to abandon up to five conditional mining lease approvals granted by the Queensland Government. The potential for 3,000 jobs was thus extinguished. No reasons were given. However, analysts believe the project is no longer aligned with China's interests in coal and is financially "unviable" given the difficultly companies face obtaining finance for coal developments. Adani’s rail line change may also have been a factor
[1] This material comprises an edited summary of a number of sources, principally Josh Robinson's article "Adani's Carmichael coal mine project", 3 May 2019 at: https://www.abc.net.au/news/2019-04-26/what-we-know-about-adanis-carmichael-coal-mine-project/11049938; also Tom Crothers' article, “Melissa Price should not bow to pressure on Adani”, 9 April 2019, https://www.smh.com.au/national/melissa-price-should-not-bow-to-pressure-on-adani-20190408-p51bz6.html
Tom Crothers was formerly general manager for water allocation and planning in the Queensland Department of Environment and Resource Management. He is a director of Stellar Advisory Services, specialising in rural water matters. He coauthored the report, Draining the Lifeblood: groundwater impacts of mining in the Galilee Basin, which was commissioned by Lock the Gate.
Other sources include the online article https://www.abc.net.au/news/2016-12-05/what-we-know-about-adani-and-the-carmichael-mine-project/8094244, and Toby Crockford's article, 26 March 2019": Adani fined after stormwater flows into north Queensland wetlands
[2] The foregoing is an edited summary of Peter Hannam's article "What's next for the Adani mine?", which appeared in the Sydney Morning Herald on 26 May 2019: https://www.smh.com.au/environment/conservation/what-s-next-for-the-coal-mine-that-helped-return-morrison-to-power-20190520-p51p7j.html
[3] Ibid.
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[3] Ibid.
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