True to her word, Queensland Premier Annastacia Palaszczuk announced on May 31 that another approval had been given to the controversial Adani coal mine in the Galillee Basin. But while more approvals still have to be gained and other coal miners are getting out, it is not yet clear that Adani will succeed.
On the last day in May, the Department of Environment and Science (DES) approved mining giant Adani’s management plan for the endangered black-throated finch. This is one of many outstanding approvals necessary before the Adani Carmichael mine can legally go ahead. It comes on the back of a huge campaign by the pro-coal media and the Morrison government to get the mine up and running.
Palaszczuk has claimed that Adani’s groundwater management plan, due by June 13, is all that stands in the way of the project proceeding. However, the government’s own website shows several other approvals must be given before the mine and its associated infrastructure can begin construction.
First, the CSIRO has to review Adani’s Groundwater Dependent Ecosystem Management Plan (GDEMP). DES then has to advise Adani of any additional requirements by June 7, giving it until June 10 to submit a revised GDEMP. DES will then make a final decision by June 13.
But this timeline relies on the CSIRO responding within Adani’s timeframe. A three-day turnaround on both these approvals could also spark further appeals.
There is also a potential legal challenge to the Adani project because of federal environment minister Melissa Price’s rushed approval.
Other approvals are necessary, including: those allowing preliminary work on the railway by the Coordinator-General; the lease on Moray Downs land to allow rail construction which must be finalised by June 30; the lease on Moray Downs land for the workers’ camp and airport which must be finalised by July 31; rail infrastructure and rolling stock accreditation by July 31; a licence to build and operate the railway line by July 31; infrastructure agreements between the state government and local authorities required by September 30; and rail infrastructure and rolling stock accreditation by July 31.
By June 30, the Queensland government must also sign off on an in-principal agreement to allow Adani to defer paying royalties. But, as the state budget is due on June 11, it is assumed this has already been finalised.
According to The Australia Institute (TAI), the Queensland government is offering a secret deal worth hundreds of millions of dollars, as well as a free access road worth $100 million. The TAI report estimates the royalty deal will lend Adani $215 million to $385 million, the terms of which Palaszczuk is still keeping secret.
Federal minister for Resources and Northern Australia Matt Canavan wants the Adani mine to be the pathfinder to open up the whole Galilee Basin.
Six mining proposals already have the necessary approvals and the Clive Palmer-backed Alpha North proposal is currently being assessed. None have begun construction.
Georgina Rinehart’s Hancock Coal and GVK Hancock, Clive Palmer’s Waratah coal and MacMines Austasia have current mining applications. All would depend on shared infrastructure — rail, road and air — developed for the Carmichael project, as well as favourable royalty deals.
But the economic viability of exploiting Galilee coal has been questioned for many years. A report by US-based Institute for Energy Economics and Financial Analysis (IEEFA), Remote Prospects: A financial analysis of Adani's coal gamble in Australia's Galilee Basin released in November 2013, warned that Adani’s controversial 60 million tonne-a-year Carmichael coal mine and infrastructure project would be uncommercial.
IEEFA financial analyst and report co-author Tim Buckley said: “Our analysis shows a systemic problem with the financial viability of coal mining in the Galilee Basin. Adani may have thought they were buying a coal mine, but it is increasingly likely that they have inadvertently bought themselves the world’s most expensive cattle station.”
He added that the Queensland government’s royalty holiday announcement for the first exploiters of Galilee coal “signals to the market that these high-cost Greenfield projects in Queensland are unviable from an investment perspective”.
This analysis has been borne out by recent events.
End of coal
In March this year, just four months after being granted approval, the China Stone project adjacent to the Adani mine abandoned its mining application. The project is owned by MacMines Austasia, a subsidiary of the Meijer Energy Group, which claims to be China’s top metallurgical coke producer.
Buckley said the decision suggests China is reassessing its investment in coal. “China has made it very, very clear it wants to progressively reduce exposure to highly polluting coal fired power generation…
“But if you are moving in that direction, the last thing you want to do is introduce a whole lot more expensive imported thermal coal.”
Buckley said MacMines’ decision validated his analysis that coal production from the Galilee Basin is “financially unviable”.
“The inability to get financial backing for a project in the Galilee is key here for MacMines.
“Obviously, by relinquishing it, they’re saying they don’t think it has value, or it certainly doesn’t have value in excess of the cost of developing.”
MacMines’ withdrawl is not an isolated incident. Giles Parkinson and Michael Mazengarb said in the May 23 Review Economy that, as the Coalition government ramps up its efforts to push through the Adani coal mine, BHP has declared that thermal coal is likely to make a quicker exit than most people expect.
BHP is getting ready for a decarbonised economy chief financial officer Peter Beaven said on May 22. He said the company is refocusing on supplying copper, nickel and other non-carbonated minerals.
Beaven said that while thermal coal will remain a large market, BHP expects demand “to plateau and then decline”.
BHP’s main competitor, Rio Tinto, has recently divested from all thermal coal.
BHP and Rio Tinto’s stated position to shift away from thermal coal contrasts with Adani’s push on opening up Carmichael Coal.
During the federal election campaign, the Coalition promoted shonky economics for its jobs mantra, ignoring the growth in jobs in the renewable energy sector. Figures released by the Bureau of Statistics on renewable jobs reveal that in all states there has been an increase in full-time employment in the renewable energy sector between 2016–17 and 2017–18.
Queensland reported the largest increase (up by 1550 jobs), with Victoria and New South Wales reporting an increase of 1020 and 950 jobs respectively. In Queensland and Victoria, the increase was mainly driven by the construction of large-scale solar PV facilities and in NSW the construction of roof-top solar PV.
Victoria reported the largest percentage increase (47%) in full-time employment between 2016–17 and 2017–18, followed closely by Queensland (44%). NSW also reported strong growth in full-time employment in renewable energy activities (up 27%).
Together, NSW, Victoria and Queensland accounted for 72% of all ful-time employment in renewable energy activities in Australia in 2017–18.