While India’s Adani Group has occasionally stirred up controversy, its proposal to mine coal close to Australia’s Great Barrier Reef, and rail-transport then ship it thousands of miles to India, has had Australian environmentalists and Queensland locals howling in protest. Some industry experts there have even expressed doubts about the project’s economic viability because of the recent drop in global coal prices.
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The Economic Times quoted Tim Buckley, Director of Energy Finance Studies, Australasia, for the Institute for Energy Economics and Financial Analysis (IEEFA), as saying: “It’s not surprising that minister Hunt is going along with Premier Newman and Prime Minister Abbott’s desire to facilitate foreign firms in their efforts to try to prop up Australia’s declining coal industry. Ironically, if this project proceeds, it will actually accelerate the longer-term destruction of Australia’s coal export industry by dramatically expanding the capital invested whilst at the same time driving coal prices down globally. Our analysis forecasts that this would drive down thermal coal export prices a further 10-20 percent, thereby squeezing coal sector profit margins which are already down to zero.”
The same news report also talked of how Greenpeace was another major opponent of the project. The Carmichael coal mine in Queensland’s Galilee Basin, would be the biggest-ever in Australia. It would include six open cut pits and five underground mines, spread over 28,000 hectares. Just to give some perspective, the mine would be seven times the area of Sydney Harbor. Environmentalists, thus, question the impact of the dumping of three million cubic meters of sea-bed dredged up from inside the World Heritage Area into the Great Barrier Reef Marine Park, saying, at a minimum, it would be detrimental to the Reef, but could even destroy it completely.
An article in the Huffington Post by David Fogarty, Editor, Climate Change Specialist, includes a quote by Senator Larissa Waters, the Australian Greens environment spokesperson, as saying, history would look back on Prime Minister Tony Abbott’s government’s decision today “as an act of climate criminality.”
So, clearly, the stage is set for a showdown between the environmentalists on the one side, and the industrial/mining lobby and the Australian Government, on the other. Earlier in the week, for example, Australian model Robyn Lawley posted a nude photo of herself on social networking site Instagram to protest against the project. This, say some, only reflects the concerns raised by environmentalists. The 25-year-old Lawley alleged that Adani had a “dirty track record” and was responsible for ‘destroying protected mangrove areas in India. Adani, till the time of the writing of this report, had offered no response to this allegation.
Australian Environment Minister Hunt, on the other hand, tried to counter such apprehension by explaining in great detail how the project would boost the Australian economy. He explained that at full export capacity, the project is expected to contribute almost $930 million to the Mackay region’s gross regional product and $2.97 billion to the Queensland economy each year for the next 60 years. The mining project will generate an estimated 2,475 construction jobs and a further 3,920 jobs during the operations phase.
The author, Sohrab Darabshaw, contributes an Indian perspective on industrial metals markets to MetalMiner.