Why are we still pursuing the Adani Carmichael mine?

Michael West, University of Sydney

Why, if Adani’s gigantic Carmichael coal project is so on-the-nose for the banks and so environmentally destructive, are the federal and Queensland governments so avid in their support of it?

Once again the absurdity of building the world’s biggest new thermal coal mine was put in stark relief on Monday evening via an ABC Four Corners investigation, Digging into Adani.


Read more: Adani gives itself the green light, but that doesn’t change the economics of coal


Where the ABC broke new ground was in exposing the sheer breadth of corruption by this Indian energy conglomerate. And its power too. The TV crew was detained and questioned in an Indian hotel for five hours by police.

It has long been the subject of high controversy that the Australian government, via the Northern Australia Infrastructure Facility (NAIF)that is still contemplating a A$1 billion subsidy for Adani’s rail line, a proposal to freight the coal from the Galilee Basin to Adani’s port at Abbot Point on the Great Barrier Reef.

But more alarming still, and Four Corners touched on this, is that the federal government is also considering using taxpayer money to finance the mine itself, not just the railway.

No investors in sight

As private banks have walked away from the project, the only way Carmichael can get finance is with the government providing guarantees to a private banking syndicate, effectively putting taxpayers on the hook for billions of dollars in project finance.

The prospect is met with the same incredulity in India as it is here in Australia:

FOUR CORNERS: “Watching on from Delhi, India’s former Environment Minister can’t believe what he is seeing.”

JAIRAM RAMESH: “Ultimately, it’s the sovereign decision of the Australian Government, the federal government and the state government.

FOUR CORNERS: “But public money is involved, and more than public money, natural resources are involved.

JAIRAM RAMESH: “I’m very, very surprised that the Australian government, uh, for whatever reason, uh, has uh, seen it fit, uh, to all along handhold Mr Adani.”

Here we have a project that does not stack up financially, and whose profits – should it make any – are destined for tax haven entities controlled privately by Adani family interests. Yet the Queensland government has shocked local farmers and environmentalists by gifting Adani extremely generous water rights, and royalties concessions to boot.

Why are Australian governments still in support?

The most plausible explanation is simply politics and political donations. There is no real-time disclosure of donations and it is relatively easy to disguise them, as there is no disclosure of the financial accounts of state and federal political parties either. Payments can be routed through opaque foundations, the various state organisations, and other vehicles.

Many Adani observers believe there must be money involved, so strident is the support for so unfeasible a project. The rich track record of Adani bribing officials in India, as detailed by Four Corners, certainly points that way. But there is little evidence of it.

In the absence of proof of any significant financial incentives however, the most compelling explanation is that neither of the major parties is prepared to be “wedged” on jobs, accused of being anti-business or anti-Queensand.

There are votes in Queensland’s north at stake. Furthermore, the fingerprints of Adani’s lobbyists are everywhere.

Adani lobbyist and Bill Shorten’s former chief of staff Cameron Milner helped run the re-election campaign of Premier Annastacia Palaszczuk. This support, according to The Australian, has been given free of charge:

Mr Milner is volunteering with the ALP while keeping his day job as director and registered lobbyist at Next Level Strategic Services, which counts among its clients Indian miner Adani…

The former ALP state secretary held meetings in April and May with Ms Palaszczuk and her chief of staff David Barbagallo to negotiate a government royalties deal for Adani, after a cabinet factional revolt threatened the state’s lar­gest mining project.

Adani therefore enjoys support and influence on both sides of politics. “Next Level Strategic Services co-director David Moore — an LNP stalwart who was Mr Newman’s chief of staff during his successful 2012 election campaign — is also expected to volunteer with the LNP campaign.”

So it is that Premier Palaszczuk persists with discredited claims that Carmichael will produce 10,000 jobs when Adani itself conceded in a court case two years ago the real jobs number would be but a fraction of that.

If the economics don’t stack up, why is Adani still pursuing the project?

The Adani group totes an enormous debt load, the seaborne thermal coal market is in structural decline as new solar capacity is now cheaper to build than new coal-fired power plants and the the government of India is committed to phasing out coal imports in the next three years.

Why flood the market with 60 million tonnes a year in new supply and further depress the price of one of this country’s key export commodities?

The answer to this question lies in the byzantine structure of the Adani companies themselves. Adani already owns the terminal at Abbot Point and it needs throughput to make it financially viable.

Both the financial structures behind the port and the proposed railway are ultimately controlled in tax havens: the Cayman Islands, the British Virgin Islands and Singapore. Even if Adani Mining and its related Indian entities upstream, Adani Enterprises and Adani Power, lose money on Carmichael, the Adani family would still benefit.


Read more: Australia’s $1 billion loan to Adani is ripe for High Court challenge


The port and rail facilities merely “clip the ticket” on the volume of coal which goes through them. The Adani family then still profits from the privately-controlled infrastructure, via tax havens, while shareholders on the Indian share market shoulder the likely losses from the project.

As the man who used to be India’s most powerful energy bureaucrat, E.A.S. Sharma, told the ABC: “My assessment is that by the time the Adani coal leaves the Australian coast the cost of it will be roughly about A$90 per tonne.

“We cannot afford that, it is so expensive.”

More questions than answers remain

 

This renders the whole project even more bizarre. Why would the government put Australian taxpayers on the hook for a project likely to lose billions of dollars when the only clear beneficiaries are the family of Indian billionaire Gautam Adani and his Caribbean tax havens.

My view is that this project is a white elephant and will not proceed. Given the commitment by our elected leaders however, it may be that some huge holes in the earth may still be dug before it falls apart.

Michael West, Adjunct Associate Professor, School of Social and Political Sciences, University of Sydney

This article was originally published on The Conversation. Read the original article.

Adani Carmichael Mine

A House Of Cards In Australia

Adani’s Abbott Point Coal Terminal Faces Escalating Financial Risk

IEEFA Australia: Adani’s Bad Month

Adani’s Bad Month The potential for Adani’s Carmichael coal mine proposal in northern Australia took a dramatic turn this week as one major Chinese bank after another ruled out financing the project. Project on the Ropes The news comes shortly after Queensland state’s Labor Party government promised to block a federal taxpayer-funded loan to Adani [...]

Is this the end of the road for Adani’s Australian megamine?

var block_td_uid_1_5b55ef83e38fa = new tdBlock(); block_td_uid_1_5b55ef83e38fa.id = "td_uid_1_5b55ef83e38fa"; block_td_uid_1_5b55ef83e38fa.atts = '{"0":"","navigation":"","style":"","separator":"","post_ids":"","category_id":"","category_ids":"","tag_slug":"","autors_id":"","installed_post_types":"","sort":"","limit":"5","offset":"","el_class":"","header_text_color":"","header_color":"","articles_color":"","next_prev_color":"","next_prev_border_color":"","f_title_font_header":"","f_title_font_title":"Block title","f_title_font_settings":"","f_title_font_family":"","f_title_font_size":"","f_title_font_line_height":"","f_title_font_style":"","f_title_font_weight":"","f_title_font_transform":"","f_title_font_spacing":"","f_title_":"","f_article_font_title":"Articles title","f_article_font_settings":"","f_article_font_family":"","f_article_font_size":"","f_article_font_line_height":"","f_article_font_style":"","f_article_font_weight":"","f_article_font_transform":"","f_article_font_spacing":"","f_article_":"","css":"","tdc_css":"","block_template_id":"","td_column_number":3,"ajax_pagination_infinite_stop":"","td_ajax_preloading":"","td_ajax_filter_type":"","td_filter_default_txt":"","td_ajax_filter_ids":"","color_preset":"","ajax_pagination":"","border_top":"","class":"td_uid_1_5b55ef83e38fa_rand","tdc_css_class":"td_uid_1_5b55ef83e38fa_rand","tdc_css_class_style":"td_uid_1_5b55ef83e38fa_rand_style"}'; block_td_uid_1_5b55ef83e38fa.td_column_number = "3"; block_td_uid_1_5b55ef83e38fa.block_type = "td_block_trending_now"; block_td_uid_1_5b55ef83e38fa.post_count = "5"; block_td_uid_1_5b55ef83e38fa.found_posts = "363"; block_td_uid_1_5b55ef83e38fa.header_color = ""; block_td_uid_1_5b55ef83e38fa.ajax_pagination_infinite_stop = ""; block_td_uid_1_5b55ef83e38fa.max_num_pages = "73"; tdBlocksArray.push(block_td_uid_1_5b55ef83e38fa); Trending Now Australia’s wholesale electricity market. Tax cuts 2018 Partially right: rejecting neoliberalism shouldn’t mean giving up on social liberalism [...]

The Queensland election outcome is a death knell for Adani’s coal mine

var block_td_uid_2_5b55ef83e998e = new tdBlock(); block_td_uid_2_5b55ef83e998e.id = "td_uid_2_5b55ef83e998e"; block_td_uid_2_5b55ef83e998e.atts = '{"category_id":"516","navigation":"","style":"","separator":"","post_ids":"","category_ids":"","tag_slug":"","autors_id":"","installed_post_types":"","sort":"","limit":"5","offset":"","el_class":"","header_text_color":"","header_color":"","articles_color":"","next_prev_color":"","next_prev_border_color":"","f_title_font_header":"","f_title_font_title":"Block title","f_title_font_settings":"","f_title_font_family":"","f_title_font_size":"","f_title_font_line_height":"","f_title_font_style":"","f_title_font_weight":"","f_title_font_transform":"","f_title_font_spacing":"","f_title_":"","f_article_font_title":"Articles title","f_article_font_settings":"","f_article_font_family":"","f_article_font_size":"","f_article_font_line_height":"","f_article_font_style":"","f_article_font_weight":"","f_article_font_transform":"","f_article_font_spacing":"","f_article_":"","css":"","tdc_css":"","block_template_id":"","td_column_number":3,"ajax_pagination_infinite_stop":"","td_ajax_preloading":"","td_ajax_filter_type":"","td_filter_default_txt":"","td_ajax_filter_ids":"","color_preset":"","ajax_pagination":"","border_top":"","class":"td_uid_2_5b55ef83e998e_rand","tdc_css_class":"td_uid_2_5b55ef83e998e_rand","tdc_css_class_style":"td_uid_2_5b55ef83e998e_rand_style"}'; block_td_uid_2_5b55ef83e998e.td_column_number = "3"; block_td_uid_2_5b55ef83e998e.block_type = "td_block_trending_now"; block_td_uid_2_5b55ef83e998e.post_count = "5"; block_td_uid_2_5b55ef83e998e.found_posts = "260"; block_td_uid_2_5b55ef83e998e.header_color = ""; block_td_uid_2_5b55ef83e998e.ajax_pagination_infinite_stop = ""; block_td_uid_2_5b55ef83e998e.max_num_pages = "52"; tdBlocksArray.push(block_td_uid_2_5b55ef83e998e); Trending Now Australia’s wholesale electricity market. Tax cuts 2018 Partially right: rejecting neoliberalism shouldn’t mean giving up on social liberalism [...]

Adani: Chinese state-owned company could help bankroll Carmichael coal mine

var block_td_uid_3_5b55ef84207ba = new tdBlock(); block_td_uid_3_5b55ef84207ba.id = "td_uid_3_5b55ef84207ba"; block_td_uid_3_5b55ef84207ba.atts = '{"sort":"random_posts","navigation":"","style":"","separator":"","post_ids":"","category_id":"","category_ids":"","tag_slug":"","autors_id":"","installed_post_types":"","limit":"5","offset":"","el_class":"","header_text_color":"","header_color":"","articles_color":"","next_prev_color":"","next_prev_border_color":"","f_title_font_header":"","f_title_font_title":"Block title","f_title_font_settings":"","f_title_font_family":"","f_title_font_size":"","f_title_font_line_height":"","f_title_font_style":"","f_title_font_weight":"","f_title_font_transform":"","f_title_font_spacing":"","f_title_":"","f_article_font_title":"Articles title","f_article_font_settings":"","f_article_font_family":"","f_article_font_size":"","f_article_font_line_height":"","f_article_font_style":"","f_article_font_weight":"","f_article_font_transform":"","f_article_font_spacing":"","f_article_":"","css":"","tdc_css":"","block_template_id":"","td_column_number":3,"ajax_pagination_infinite_stop":"","td_ajax_preloading":"","td_ajax_filter_type":"","td_filter_default_txt":"","td_ajax_filter_ids":"","color_preset":"","ajax_pagination":"","border_top":"","class":"td_uid_3_5b55ef84207ba_rand","tdc_css_class":"td_uid_3_5b55ef84207ba_rand","tdc_css_class_style":"td_uid_3_5b55ef84207ba_rand_style"}'; block_td_uid_3_5b55ef84207ba.td_column_number = "3"; block_td_uid_3_5b55ef84207ba.block_type = "td_block_trending_now"; block_td_uid_3_5b55ef84207ba.post_count = "5"; block_td_uid_3_5b55ef84207ba.found_posts = "363"; block_td_uid_3_5b55ef84207ba.header_color = ""; block_td_uid_3_5b55ef84207ba.ajax_pagination_infinite_stop = ""; block_td_uid_3_5b55ef84207ba.max_num_pages = "73"; tdBlocksArray.push(block_td_uid_3_5b55ef84207ba); Trending Now Malaysia Prosecutor, Fund Will Help in Swiss Graft Probe Why New Zealand outplayed Australia on the NBN Telsa [...]

Infographic: here’s exactly what Adani’s Carmichael mine means for Queensland

Greg Hunt approves Adani’s Carmichael coal mine, againWhat Adani’s Carmichael mine means for Queensland var block_td_uid_4_5b55ef84253a0 = new tdBlock(); block_td_uid_4_5b55ef84253a0.id = "td_uid_4_5b55ef84253a0"; block_td_uid_4_5b55ef84253a0.atts = '{"sort":"random_posts","navigation":"","style":"","separator":"","post_ids":"","category_id":"","category_ids":"","tag_slug":"","autors_id":"","installed_post_types":"","limit":"5","offset":"","el_class":"","header_text_color":"","header_color":"","articles_color":"","next_prev_color":"","next_prev_border_color":"","f_title_font_header":"","f_title_font_title":"Block title","f_title_font_settings":"","f_title_font_family":"","f_title_font_size":"","f_title_font_line_height":"","f_title_font_style":"","f_title_font_weight":"","f_title_font_transform":"","f_title_font_spacing":"","f_title_":"","f_article_font_title":"Articles title","f_article_font_settings":"","f_article_font_family":"","f_article_font_size":"","f_article_font_line_height":"","f_article_font_style":"","f_article_font_weight":"","f_article_font_transform":"","f_article_font_spacing":"","f_article_":"","css":"","tdc_css":"","block_template_id":"","td_column_number":3,"ajax_pagination_infinite_stop":"","td_ajax_preloading":"","td_ajax_filter_type":"","td_filter_default_txt":"","td_ajax_filter_ids":"","color_preset":"","ajax_pagination":"","border_top":"","class":"td_uid_4_5b55ef84253a0_rand","tdc_css_class":"td_uid_4_5b55ef84253a0_rand","tdc_css_class_style":"td_uid_4_5b55ef84253a0_rand_style"}'; block_td_uid_4_5b55ef84253a0.td_column_number = "3"; block_td_uid_4_5b55ef84253a0.block_type = "td_block_trending_now"; block_td_uid_4_5b55ef84253a0.post_count = "5"; block_td_uid_4_5b55ef84253a0.found_posts = "363"; block_td_uid_4_5b55ef84253a0.header_color = ""; block_td_uid_4_5b55ef84253a0.ajax_pagination_infinite_stop = ""; block_td_uid_4_5b55ef84253a0.max_num_pages = "73"; tdBlocksArray.push(block_td_uid_4_5b55ef84253a0); Trending Now Intelligence. Is it one [...]

Why the Adani project should be rejected

var block_td_uid_5_5b55ef842b6b4 = new tdBlock(); block_td_uid_5_5b55ef842b6b4.id = "td_uid_5_5b55ef842b6b4"; block_td_uid_5_5b55ef842b6b4.atts = '{"0":"","separator":"","post_ids":"","category_id":"","category_ids":"","tag_slug":"","autors_id":"","installed_post_types":"","sort":"","el_class":"","block_template_id":"","td_column_number":3,"header_color":"","ajax_pagination_infinite_stop":"","offset":"","limit":"5","td_ajax_preloading":"","td_ajax_filter_type":"","td_filter_default_txt":"","td_ajax_filter_ids":"","color_preset":"","ajax_pagination":"","border_top":"","css":"","tdc_css":"","class":"td_uid_5_5b55ef842b6b4_rand","tdc_css_class":"td_uid_5_5b55ef842b6b4_rand","tdc_css_class_style":"td_uid_5_5b55ef842b6b4_rand_style"}'; block_td_uid_5_5b55ef842b6b4.td_column_number = "3"; block_td_uid_5_5b55ef842b6b4.block_type = "td_block_homepage_full_1"; block_td_uid_5_5b55ef842b6b4.post_count = "5"; block_td_uid_5_5b55ef842b6b4.found_posts = "363"; block_td_uid_5_5b55ef842b6b4.header_color = ""; block_td_uid_5_5b55ef842b6b4.ajax_pagination_infinite_stop = ""; block_td_uid_5_5b55ef842b6b4.max_num_pages = "73"; tdBlocksArray.push(block_td_uid_5_5b55ef842b6b4); document.body.className+=' td-boxed-layout single_template_8 homepage-post '; Home Politics Australia’s wholesale electricity market. FUA AWARDSPolitics Australia’s wholesale electricity market. By Bob Lee - July [...]

Adani may still get Taxpayers $Billions

.social-1 a { color:#fc615d; }.social-1 a:hover { color:#fc615d; } Why Adani may still get its government loan Mining companies’ links with politicians ‘susceptible to corruption ``Crooked creature of ... seller of local job growth balm and lucky tax breaks for the anointed few`` jQuery(function($){ $(document).ready(function(){ if( typeof jQuery("#typed-18839608915b55ef842f947").typed == "function"){ $("#typed-18839608915b55ef842f947").typed({ strings: ["a thousand dubious lobbyists"], [...]

Australia’s $1 billion loan to Adani is ripe for a High Court challenge

{{ vc_btn:title=Mining+companies+links+to+politicians+susceptible+to+corruption+report&color=pink&size=lg&align=center&i_icon_fontawesome=fa+fa-handshake-o&button_block=true&add_icon=true&link=url%3Ahttp%253A%252F%252Fpigsfly.info%252F2017%252F10%252F21%252Fmining-companies-links-politicians-susceptible-corruption-report%252F%7C%7C%7C }} {{ vc_btn:title=Queensland+Labor+strategist+announces+he+will+stop+lobbying+for+Adani+&color=success&size=lg&i_icon_fontawesome=fa+fa-handshake-o&css_animation=fadeInDown&add_icon=true&link=url%3Ahttps%253A%252F%252Fwww.theguardian.com%252Fbusiness%252F2017%252Foct%252F16%252Fqueensland-labor-strategist-announces-he-will-stop-lobbying-for-adani%7C%7C%7C }} {{ vc_btn:title=Indian+opposition+calls+for+investigation+into+Adani+over+financial+fraud+allegations+&color=violet&size=lg&align=center&i_icon_fontawesome=fa+fa-handshake-o&button_block=true&add_icon=true&link=url%3Ahttps%253A%252F%252Fwww.theguardian.com%252Fbusiness%252F2017%252Faug%252F20%252Findian-opposition-calls-for-investigation-into-adani-over-financial-allegations%7C%7C%7C }} Australia's $1 billion loan to Adani is ripe for a High Court challenge Brendan Gogarty, University of Tasmania Indian mining giant Adani’s proposal to build Australia’s largest coal mine in Queensland’s Galilee Basin has been the source of sharp national controversy, because of its potential economic, [...]

Adani gives itself the green light, but that doesn’t change the economics of coal

Adani gives itself the green light, but that doesn't change the economics of coal Is it nearly the end of the road for coal? Samantha Hepburn, Deakin University Indian mining firm Adani yesterday announced that its board had approved plans to proceed with the controversial Carmichael coal mine in Queensland’s Galilee Basin. But it is [...]

Australian Bank Indicates It Will Not Refinance Adani

jQuery(function($){ $(document).ready(function(){ if( typeof jQuery("#typed-14650443945b55ef846a43d").typed == "function"){ $("#typed-14650443945b55ef846a43d").typed({ strings: ["The refinancing of its port comes as the company must find $5bn of loans for its Carmichael coalmine, which every Australian bank – and many international banks – have said they will not support."], typeSpeed: 35, backSpeed: 0, startDelay: 200, backDelay: 1500, loop: true, loopCount: false, [...]

DON'T MISS

POPULAR

REVIEWS

How Getty’s Olympics Photos Are Shot, Edited, And Sent Into The...

When a Getty images photographer shoots a picture at the Olympic Games, it’s often available to customers amazingly quickly—within a couple of minutes. But...