The secretly foreign-funded multinational greenie global-warming activists, who keep losing their vexatious battles in Australian courts, are nevertheless doing worryingly well in their costly economic war against our coal. In the same week that Wikileaks exposed John Podesta, the head of Hillary Clinton’s Presidential campaign (and former Obama climate adviser), as a conspirator in the US plot to help destroy the Australian coal industry, India’s $16 billion 60 million tonnes a year Adani steaming coal project in remote Queensland became a victim. It has been cut back to an initial $4 billion to mine only 25 million tonnes, rising to 40 million tonnes per annum in five to seven years; there was no assurance on achieving the original 60 million. In a clear victory for six years of activist obstructionism and delaying ‘lawfare’, Adani has admitted that ‘the additional cost of approvals and delays has to be accommodated in the project development… And the plan to begin construction next year will only happen upon resolution of outstanding approvals and court proceedings’. Despite the enthusiastic support of Labor and Liberal federal and state governments, Adani still faces three legal challenges on top of the 10 major court battles it has (eventually) won. No wonder India’s Power Minister, Piyush Goyal, has warned Australia that India’s growing demand for coal (to provide electricity to the hundreds of millions of Indians suffering from power poverty) could be met from other markets such as Indonesia and South Africa. As he told the Australian, the years of activist legal challenges, now revealed to have been funded by multi-million dollar foundations in the US, ‘will certainly dampen future investments from India’.
The coalition government needs a Plan B; the Labor/Green alliance in the last parliament defeated the Abbott attempt to amend the Environmental Protection and Biodiversity Conservation Act to limit legal challenges to government environmental approvals to those people directly affected, rather than the present open slather for anyone with an axe to grind. Although Shorten Labor has already indicated it would again oppose it, Prime Minister Turnbull has undertaken to re-introduce legislation to tackle the issue of endless court cases holding up projects. ‘While we don’t want to short change the environment, what we do need to do is make decisions in a prompt and efficient way’. But how? Reviving the old amendment won’t stop the foreign funding, in Adani’s case, of a local indigenous person in conflict with the traditional owners supportive of the project, who has been induced to be a repeat (cost-free) litigant.
The simple reality is that economics will determine coal’s future and its remarkably strong recent price recovery, especially for metallurgical coal (at a four-year high) but also for the steaming coal (up 55 per cent this year) that Adani plans to mine, has given new hope that not even vexatious greenie litigation can destroy. Although Adani says its commitment to its project is evidenced through its ownership of the Abbot Point Coal Terminal, where its 388km rail link from its Carmichael mine would terminate, and its October purchase of the operator, Abbot Point Bulk Coal, from Glencore, there are many doubters about the viability of the project even at current coal prices. The US-based S&P/Platts reports that the project, even ‘downsized and delayed, remains unbankable’, according to the director of energy finance at the Institute for Energy Economics and Financial Analysis, Tim Buckley. ‘The Galilee Basin is stranded 400 km inland from the coast without any industrial grade power, road, water, aviation or rail infrastructure in place.’ Adani Enterprises argues their coal proposal is de-risked by the existence of its sister company Adani Power willing to provide long dated offtake agreements for its largely yet-to-be-built import coal-fired power plants in western India. But IEEFA queried how meaningful this is, as ‘Adani Power is in financial distress with net debts of over $7.3 billion against a market capitalization of just $1.4 billion’. Whatever the outcome for Adani, and less than a year after the Australian coal industry was widely claimed to be in terminal decline, booming coal prices could add 2 per cent to national income this year and boost federal budget revenues by close to $7 billion. Treasurer Scott Morrison could do with a bit of luck.
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