Approval but public funding for Adani unlikely

October 15, 2015
Opponents of the Adani mine are also concerned its Abbot Point terminals will damage the Great Barrier Reef.

Environment minister Greg Hunt gave formal approval on October 15 for a massive new coalmine in Queensland's Galilee basin, “in accordance with national environment law” after the Federal Court set aside the previous approval in August.

But Indian coal mining giant Adani is unlikely to receive the federal government funding it needs to open the Carmichael mega mine.

As resource prices crash and more than 1000 coalmining jobs have been lost in Queensland alone this year, Adani's competitors have come out in opposition to any federal government assistance for the mega mine.

Commodity trading giant Glencore has publicly opposed government assistance for Adani, arguing it would hurt rest of the industry.

Glencore recently announced a cut of 500 jobs in its zinc mining operations across Australia. It also signalled a further review of its coal operations in the wake of continued declines in contract prices.

Opponents have already indicated they will launch a legal challenge to the latest approval and banks are under pressure to not provide finance.

Public funding for a rail link had been mooted by the previous Campbell Newman state government and became an issue in the Queensland election earlier this year. Labor committed to not using public funds for the rail link, but it supports the approval of Adani's mining application.

However, the federal government appears to have reversed its previous support for public funding of Adani's expansion plans.

New resources minister Josh Frydenberg said on October 8 that Adani was “a commercial operation and it needs to stand on its own two feet”. He said it “wouldn't be a priority project for the Commonwealth” under the Northern Australia Infrastructure Fund.

Environment groups welcomed Frydenberg's statement.

Chief executive of the Australian Conservation Foundation Kelly O'Shanassy said: “Adani's Galilee Basin coalmine fantasies should definitely not be financed by Australian taxpayers.”

Executive director of the Australia Institute Ben Oquist said it was “sensible politically and economically not to use [taxpayer subsidies for] a giant new coalmine in the Galilee Basin.

“[It] would be a massive financial and environmental liability for Australia. Right now we're seeing a slumping coal price, the free fall in market capitalisation for the world's biggest coal companies and a surge of global investment and innovation in renewable energy.

“A massive new coalmine would be an economic white elephant, costing the taxpayer billions, just at the time the world is moving away from coal.”

The Australia Institute's report, Too Close for Comfort: How the coal and gas industry get their way in Queensland was released on October 8. It reveals the close relationship between Queensland politicians, public servants and coal and gas mining corporations.

The influence goes beyond formal lobbying and donations to political parties. It includes the revolving door of public servants, politicians and mining executives which shows that they are in effect all part of the same club — one that does not have the interests of the community or the planet at heart.

The report concludes: “Finally, can concerns about a lack of action on climate change and fossil fuel emissions ever be addressed in an environment where governments and public officials at all levels have such close and secretive relationships with coal and gas industries?”

In responding to the report, Lock the Gate spokesperson Drew Hutton said the Queensland government must urgently implement and broaden a promised Crime and Corruption Commission inquiry into political donations and government decisions.

“We need to clean up politics and mining in Queensland and that should start with a far-reaching public inquiry into the influence of the mining industry and urgent changes to place better controls on lobbyists and constrain the 'revolving door' between mining and government,” Hutton said.

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