Digging yourself a hole: how Australia is keeping coal current

| 30th August 2017
Climate Action Moreland calls out CommBank on silence around funding AdaniCarmichael coal mine on 12 May 2017. (C) Takver, via Flickr.
The Adani-Carmichael Coal Mine is an enduring stain on Australia’s underdeveloped environmental policies, with new fraud cases and environmental assessment reports weighing the venture down. Australian environmentalist MARIAH SAMPSON takes a look at the current state of affairs surrounding the plans for the biggest open coal mine in the world.

As renewable energy swells on the tide of global climate awareness and countries commit to preventing the average global temperature from exceeding two degrees Celsius, how can we make sense of the enduring investments into fossil fuels in large parts of the world?

The debate surrounding the Adani-Carmichael Coal Mine and Rail project in Australia is but one such situation. The new project of the Indian based Adani Group, a multibillion dollar Indian business and energy enterprise, is intended to be one of the largest thermal coalmines in the world. The Carmichael mining project, however, has faced years of public disapproval and legal challenges.

On the environmental front, the mine would demand significant water resources from the Belyando River (in their 2015 application for a water licence the Adani Group requested access to 12.5 billion litres per year). Controversy also surrounds the extent to which drilling and mining activities would affect local ground water supplies.

The mine further poses threats to local habitats for a number of threatened and vulnerable species, and heightened industrial activities at the port of Abbot Point are predicted by scientists and environmentalist groups to have significant negative impacts on the Great Barrier Reef - which has already suffered severe coral bleaching in recent years.


Fraud investigation

The financial viability of the mine has also received much scepticism. The entire project, including the rail line connecting the mine to the Abbot Point port, is expected to cost over 20 billion dollars. In order to fund the project, the Adani Group has been seeking funding from various public sources in Australia such as NAIF, the Northern Australian Investment Fund ($900 million AUD), and State and Federal Loans ($1 billion), with predictions that an extra $10 billion will likely be necessary over a four-year period.

Significant doubts have been raised as to the eligibility of the Adani Group to receive public funding and the actual viability of large-scale investments like these. Key concerns consider India, the mine’s primary costumer and its national commitments to phase out imported coal - a move that holds the potential to seriously undermine the project. This is compounded by the decline of coal prices since 2011 and an 80 percent reduction to the price of solar energy in India.

There is also the scandal regarding a current fraud investigation into the acquisition of equipment for the construction of two electricity transmission grids in Maharashtra, India, which allegedly resulted in the movement of up to $235 million US dollars into a trust account in Mauritius controlled by Vinod Adani, the older brother of Gautam Adani, the billionaire Adani Group chief executive.

This allegation of fraud is particularly poignant to Australia’s proposed Carmichael mining project as the deal includes a royalty scheme that would see up to $120 million AUD moved to a subsidiary based in the Cayman Islands owned by the Adani family, coincidentally away from taxes and Australian investors. The Adani family deny any wrongdoing.


The noble goal


The key arguments in favour of the mine are the production of jobs in Queensland, Australia, and the potential to increase the electricity in India, in which millions of people still live off the electrical grid.

However, the much-touted number of 10,000 potential new jobs was rejected by Adani representatives in court, at which time 1,464 long-term jobs were predicted for the life-span of the project.

As for the noble goal of increasing access to the electrical grid in India, off grid renewable energy sources such as solar are achieving massive successes, which is being reflected in the record breaking affordability of solar energy.

Times are changing fast. A plan that in 2010 and 2011 seemed profitable has, in the intervening years, become a source of derision and public exasperation. The renewed pledge of nations to reduce and limit carbon emissions is in direct conflict to the mining of coal – the burning of which, mined in such quantities, would be significant - particularly in light of recent solutions to climate change such as carbon sequestration. It is far easier to keep carbon dioxide out of the air by leaving it in the ground.

The existence and progression of the Adani-Carmichael coal mine is challenging to a clean energy future, but the negative public response smacks of change and perhaps even hope.

This Author


Mariah Sampson is an Australian environmental scholar, currently based at the University of Freiburg in Germany. She is a co-founder of the NGO The Green Bean, an organisation that sets up educational programs on biodiversity and nature in schools across Europe. This article is part of a series produced in collaboration between The Ecologist and Climate Tracker.