Adani’s claims to have secured finance questioned

July 20, 2018
Brisbane protest against Adani, 2017. Photo: Alex Bainbridge

Months after missing its March deadline for financial closure on its Carmichael mine and rail project, Adani has relaunched its PR offensive with claims its finances are almost stitched up.

In an interview on July 17, Karan Adani, son of the company’s owner Gautam Adani, told Indian TV it was now finalising the rail project’s financing.

Stage 1 of the revised project is estimated to cost $5.3 billion, consisting of $2.05 billion for the coal mine and associated airport, road access, water, sewage and power infrastructure, plus $3.3 billion for the 388 kilometre railway line.

Karan Adani’s understatement of the cost of the rail link by almost $2.5 billion is par for the course in Adani propaganda. He also claimed that all approvals were in place and that work would commence immediately after the rail finance was approved.

However, this is not the case. There remain several obstacles before work at the mine can begin, including:

1. Federal approval for Adani’s proposed water scheme, involving pumping 12.5 billion litres of water a year from the Suttor River to the mine. The government has delayed its decision and asked Adani for more information.

2. A court challenge by a group of Wangan and Jagalingou people to a land-use agreement. If the challenge to invalidate the agreement is successful, Adani would then require the Queensland government to extinguish native title at the mine site.

3. A stop order application by a group of Juru people, amid a dispute about cultural heritage in the vicinity of the Abbot Point coal terminal and a section of the rail link.

4. Finance to build an airstrip near the mine site for fly-in fly-out workers. Townsville council reallocated funding for the project recently, having expressed concerns about Adani’s ability to continue with the Carmichael project.

5. Finance to build the rail line. After the Queensland government vetoed a loan through the Northern Australia Infrastructure Facility, environmentalists fear the government-backed Export Finance and Insurance Corporation may support the rail link.

6. The Queensland Labor government has imposed more than 240 conditions on the Carmichael coalmine project, 132 of which relate to water. On May 3, the coordinator-general fixed a new lapse date for the project’s evaluation report to August 14 next year. A month ago, the government also insisted Adani find the source of local groundwater before it signs off on the water management plan for the mine.

Federal Labor environment spokesperson Mark Butler, who opposes the mine, was sceptical of claims Adani would soon have the finance required for the rail line.

“If I had a dollar for every front page where Adani said it had finance for this new coal mine I'd be a very rich man,” he said. “Frankly, I'll believe it when I see it.

“My view about this project has been clear for some time. I don’t think it stacks up. I don't think it is in the national interest.”

The day after Karan Adani’s interview a clarifying statement was issued by Adani Australia. It repeated his comments but said the company “continues to work to secure finance for the Carmichael project”.

It remains unclear where the money to build the mine will come from, or the extent of any external commitment to Carmichael. Tim Buckley, from the Institute for Energy Economics and Financial Analysis, said Gautam Adani had the financial wealth to self-fund Carmichael and “we can’t assume this project is dead”.

“Gautam Adani has never been wealthier than he is today. Never underestimate a billionaire,” Buckley said.

Buckley said the statements by Karan Adani and by the company appeared to be “continued pressure on the federal government to provide yet another massive subsidy”.

This “continued pressure” by Adani will be met by an emboldened movement against the project, particularly against any further public funding to Adani or to its agents for construction of the rail project.

On July 18, Australian Conservation Foundation Chief Executive Officer Kelly O’Shanassy said: “These comments confirm what we have known for some time; Adani is serious about building its dirty coalmine and it is time for our elected representatives to side with the wider community and stop it.

“Digging up and burning coal from the Adani mine will unleash huge amounts of climate pollution, which will accelerate damage to the Great Barrier Reef and turbo-charge dangerous extreme weather events like bushfires, heatwaves and floods.

“Adani’s polluting coal mine will also trash critical habitat for precious native species like the Black-throated finch. And it will be allowed to guzzle our critical groundwater.

“This is not a project that represents the best interests of the community and the natural world we rely on. Now, more than ever, we need a commitment from all political parties that they will stop this polluting coal mine before it wrecks our safe climate and natural world.

“Community action has driven our elected representatives to stop these kinds of dangerous and environment-wrecking projects in the past. The Franklin River flows freely today as testament to this.

“The community campaign to stop Adani’s polluting coal mine is the biggest environmental movement in Australia since the Franklin River dam protests. We will continue to organise against Adani’s dirty coal mine until it is stopped, and the Galilee Basin is closed for coal mining.”

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