Qld government funds coal rail line

Public assets will be sold to pay for a new private rail line for the coal industry. Photo: GetUp.

The G20 barriers were still in place, the interstate police contingents had not left Brisbane, and US President Barack Obama’s “Brisbane” speech calling for protection for the Great Barrier Reef was still resonating when Premier Campbell Newman announced he had brokered a deal with Indian mining company Adani.

Newman and Indian Prime Minister Narendra Modi met in Brisbane during the summit to seal the deal, whereby funds from the lease of public assets would be used to pay for the construction of the 400 kilometre rail link from the Carmichael mine in the Galilee Basin to the controversial Abbot Point coal terminal.

This gave the green light for the project, which had been stalled because of problems with finding investment from private financial institutions and the fall in commodity prices.

Critical to the project was Adani securing a loan of up to $US1 billion from the State Bank of India (SBI) for the Carmichael mine, which it aims to build by the end of 2017.

The Queensland government’s decision to partly fund the rail line to Abbot Point also raises the possibility of the development of the stalled Alpha mine, a project of Indian conglomerate GVK and Hancock Coal. Another player in the Alpha venture is rail freight giant Aurizon, which was previously part of Queensland Rail before its privatisation.

Both these mine developments have been given approval by state and federal governments despite strong opposition from local farmers, community organisations, environmentalists and scientists.

The Carmichael mine project will be one of the biggest in the world, covering 200 square kilometres and producing about 60 million tonnes of coal a year. The colossal proposal consists of six open-cut pits and up to five underground mines, to supply Indian power plants with enough coal to generate electricity for up to 100 million people.

In granting approval in May, the Queensland government rejected the advice of the Independent Expert Scientific Committee (IESC) on Coal Seam Gas and Large Coal Mining Developments, which was set up in 2012 to advise state and federal governments.

The committee’s main concern was the impact of the mine on groundwater in the underlying Great Artesian Basin. It said it had "little confidence" in much of the modelling used by Adani and highlighted gaps in its data. The IESC said not enough was known about how coal seams connect to the Great Artesian Basin, or the likely effects of mining.

The committee also said it was worried about the cumulative impacts of the Carmichael project when added to other large mining schemes in the area, as well as the risk of flooding and discharges from the mine into creeks and rivers.

At the time of the Commonwealth government approval of the Carmichael mine in July, Greens Senator Larissa Waters said the approval of the mine to transport coal through the Great Barrier Reef was an environmental and climate disaster.

"Off the back of repealing effective action on climate change, the Abbott government has ticked off on a proposal for Australia's biggest coalmine to cook the planet and turn our reef into a super highway for coal ships," she said in a statement.

In the context of unemployment nudging 7% and with an eye to the state election due early next year, Newman has apparently justified public subsidy to the coal industry on the grounds of job creation. This is no more than a trick. The Carmichael mine/rail project is set to create 2000 short-term jobs during the construction phase and 3900 when in operation.

This compares with the 4000 coal mining jobs lost in Queensland in the past two years.

Adani has said on its website that the life of the mining project is just 60 years. The workforce will be on a “Fly in Fly Out” (FIFO) basis. This will do nothing to address the destruction of settled mining communities (such as Collinsville and Emerald) resulting from mine closures. It will compound the already existing social damage cities like Gladstone experience as a result of the FIFO model.

The government claims that the project will inject $500 million into Queensland's economy during construction and $3 billion at full export capacity. It says the $16.5 billion development will produce 60 million tonnes of coal a year, over the 60-year lifespan.

Director of Energy Resource Studies Australasia at the Institute for Energy Economics and Financial Analysis Tim Buckley told Renew Economy on November 17 that “many would consider this a government simply pissing taxpayers’ money up against the wall.”

He said Australia’s “coal addicted” politicians have stepped up with public cash “where international financiers wouldn’t dare to tread”, by proposing to use taxpayers’ money to fund “unviable and highly questionable” coal projects.

“The people of Queensland and Australia should be outraged at this idea of questionable politicians spending many billions of tax payer dollars to make an unviable, unwanted and dangerous mega coal project a reality,” Buckley said.

“The Galilee coal projects are totally, commercially unviable. Any project undertaken is highly likely to end up as a stranded fossil fuel asset as the rest of the world rapidly transitions to lower carbon solutions. Coal has entered structural decline — there is no two ways about that fact.”

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