India’s Adani wins approval for long delayed Australian coal mine

The project’s supporters say it will boost the economy, but environmental groups say it will damage marine ecosystems.

Australia Adani mine protest
Environmental campaigners say the proposed Carmichael coal mine in Australia's state of Queensland will damage the Great Barrier Reef [File: Dan Peled/AAP Image via AP]

India’s Adani Enterprises on Thursday received the go-ahead to start construction of a controversial coal mine in Australia‘s outback after a state government approved a final permit on groundwater management.

The Carmichael mine has been a lightning rod for climate change concerns in Australia and was seen as a factor in the surprise return to power of the conservative Liberal-National coalition in a national election in May.

First acquired by Adani in 2010, the project is slated to produce 8-10 million tonnes of thermal coal a year and to cost up to $1.5bn, but has been mired in court battles and opposition from green groups.

“We’re ready to start work on the Carmichael Project and deliver the jobs these regions so badly need,” Chief Executive Lucas Dow said in a statement.

The go-ahead comes after Queensland’s Department of Environment and Science said it had approved Adani’s Groundwater Dependent Ecosystem Management Plan following a rigorous assessment “based on the best available science.”

The approval potentially paves the way for half a dozen new thermal coal mines to come online in Australia by opening up Queensland’s remote Galilee basin with rail infrastructure to the coast 320km away at Abbot Point.

Holders of other coal deposits in the basin include some of Australia’s wealthiest iron ore magnates such as Gina Rinehart, who has a joint venture with India’s GVK Group, and controversial one-term politician Clive Palmer.

‘Bad news’ for environment

Conservation groups expressed disappointment with the decision and vowed to continue fighting the development.

The approval was “bad news” for the World Heritage-listed Great Barrier Reef, the Australian Marine Conservation Society said.

“Climate change is the greatest threat to our reef’s future and we cannot risk opening up the Galilee basin for other major coal projects which would heat our oceans and lead to more stress on our beautiful corals,” it said.

The decision comes as other developed nations step up strategies to meet Paris Agreement emissions targets, and as many banks and insurers scale back exposure to coal and to new thermal coal mines in particular.

China open pit coal mine
Demand for coal is falling in the West but remains strong in Asia [File: China Photos/Getty Images]

Thermal coal is mainly used for power generation and is being increasingly replaced by renewable energy sources in the United States and Europe.

But it remains the dominant source of power generation across much of Asia. The International Energy Agency expects coal demand to hold steady through 2023, buttressed by rising consumption from China and India, the likely destination for most of Carmichael’s output.

“You hear a lot about all the reduction in demand in the EU, the US, Australia, but there is still very big demand for coal in the rest of the world, increasing demand in fact,” Abby Macnish, head of investments at TWD Invest, which has about 350 million Australian dollars ($242m) under management, told the Bloomberg news agency. “It’s still the main energy source to produce electricity.”

Australia’s federal and state governments have repeatedly said that the mine must stand on its own merits, and a recent drop in prices for low-grade thermal coal has raised doubts about whether the mine can prove economically feasible.

Adani has scaled back initial plans for a 60 million tonne per year mine and has said that it will self-fund the project, backed by ready buyers in its own Indian power plants and its trading business.

Source: News Agencies