Adani's proposed Carmichael coal mine is proving controversial. So, what are the facts?
It’s the most controversial mine under consideration in Australia right now. But what are the facts about Adani’s proposed Carmichael coal mine in Queensland?
To try to present a balanced view, we commissioned a research piece to scour the mountains of words that have been reported about this project so far. Let’s take a look.
What is Adani proposing?
If it gets the go-ahead, Adani’s Carmichael coal mine in Queensland’s Galilee Basin will be both an open-cut and underground mine. The project’s surface disturbance area will be nearly 30,000 hectares.
It was granted preliminary approval by the Newman State Government in 2014, after Adani claimed the proposed $16.5billion mine would create thousands of local jobs and produce 25 million tonnes of coal per year during its first phase.
Why is Adani’s Carmichael mine controversial?
This is a big question. The mine has been subject to protests, legal questions, plenty of media coverage and questions in State and Federal Parliament. Its critics raise questions about the company’s record, the need for the project, the company’s claims, the amount Governments are going to subsidize the project and the potential environmental impact.
Let’s break it down, claim by claim.
What’s Adani’s company record
Adani Group is an India-headquartered multinational commodity-trading company established in 1988.
Protesters claim that Adani Mining, the subsidiary of Adani Group that is developing the mine, has a “history of destruction, corruption and criminal activity”. You can read the claims, including allegations made by the company’s detractors about Adani’s exploitation of workers, poor environmental record, financial arrangements and business dealings here, on a website called “The Adani Files”.
On the other hand, Adani Group is quite popular in India. The company’s Wikipedia page proudly states “ in 2015, Adani was ranked India's most trusted infrastructure brand by The Brand Trust Report 2015”. It’s also India’s largest privately owned power producer.
How many jobs will the Adani coal mine create?
Originally the company promised the mine would create 10,000 jobs. There’s been some conjecture over whether that’s correct, with some experts saying the figure is closer to 1,500 jobs. You can read more here. But Adani itself doesn’t say all 10,000 will be permanent or all mine-based, rather that the jobs would be created “through direct and indirect value creation”.
In announcing in early June 2017 that the project would indeed go ahead, Adani boss Gautam Adani said he was proud to be creating “the largest single infrastructure and job creating developments in Australia's recent history”. No matter how you cut it, $16.5billion is a massive investment — it’s going to create jobs.
How much coal will Adani’s Carmichael mine produce?
Adani originally said the coal mine would produce 25 million tonnes of coal during its first phase. It has since given more detail, saying the mine would produce 2.3 billion tonnes of coal over 60 years — which actually averages out at 40 million tonnes a year. The project’s environmental impact statement for the mine shows it would produce 60 million tonnes a year during peak production — meaning the overall resource mined could be as high as 3.5 billion tonnes.
What’s happening with Adani’s financing of the Carmichael mine?
It is on the public record that the company has struggled to find a bank to fund the project. As a result, State and Federal Governments have offered subsidies to Adani to allow the project to go ahead.
The Federal Government has promised a $1billion Northern Australia Infrastructure Facility loan to Adani to build a railway from the mine site to its port. The Queensland State Government announced a royalties deal worth hundreds of millions of dollars (possibly $320 million) in late May 2017, which it hoped would help kickstart preliminary works. You can read more about the pros and cons of the royalties deal with Adani here.
No matter how the project is eventually funded, parent company Adani Group has shown a determination it will go ahead — announcing on 6 June it had given Adani Mining the “green light” to go ahead as soon as bank backing is secured.
What will the environmental impacts of Adani’s mine be?
Perhaps the most controversial aspects of the Carmichael mine are the environmental ones. Some people question the company’s environmental record, the scale of the project and whether it’s safe to ship coal from a new port where it could impact the Great Barrier Reef (following a couple of previous issues involving Adani).
On the flipside, the mine has already met Australian Federal Government requirements for the project. It was approved by Environment Minister Greg Hunt in 2015 and actually survived a High Court challenge that called Adani’s promises on the environmental impact of the project into question.
Which brings us to the last point.
Do we need the Carmichael coal mine?
Countries around the world are moving away from coal because of concerns about climate change and in order to meet their obligations under the Paris Climate Accord.
Green groups, environmentalists, stakeholders, protest groups and the media have all questioned the need for the project, at least at the planned scale.
But there are others who say the mine is absolutely necessary. The Australian’s Judith Sloan speaks for many when she says: “Think of the benefits of this world-class project for India, a country where more than 300 million people live without electricity. And consider the more than 100 high-efficiency, low-emissions power stations being built around the world that will consume coal whether or not they use (high-quality, low-ash) Australian coal.
“But let’s think mainly about the local job benefits of the Adani mine and the other mines that would follow on the basis of the shared infrastructure — rail, port, loading facilities. Think of the steady flow of royalties for a debt-ridden Queensland government, even if there is a requirement to provide a royalty holiday initially. Think of the boost to exports and the flow of company tax receipts.”
It’s possible to conclude that all of these quite reasonable questions seem to generate many conflicting opinions and answers, often from Adani itself.
Whether this project does or does not go ahead would seem far from certain so if you’re looking for your next job opportunity in the mining industry, don’t wait for Adani. Get in touch with the team at Mining People International today.