Qld Labor backs mega coal mines despite economic, climate warnings | RenewEconomy

Qld Labor backs mega coal mines despite economic, climate warnings

Queensland Labor’s approval of Indian miners’ controversial plans to exploit Galilee Basin coal deposit flies in face of analyst warnings, green concerns.


Queensland’s Labor government has angered green groups and flown in the face of economic analysis, after green-lighting the controversial plans of two Indian companies to exploit the huge untapped coal resource in the state’s Galilee Basin.

If approved federally, the multi-billion dollar plans of Adani Group and GVK could result in the development of nine new mega coal mines in Queensland’s Galilee Basin, along with the associated rail and port infrastructure necessary to convert Abbot Point – which abuts the World Heritage-listed Great Barrier Reef – into a coal shipping superhighway.

The state government’s approval has confounded green groups, who had hoped for a harder line on fossil fuel development in the state than that of the previous Liberal government, which – having unabashedly backed big coal – was unceremoniously dumped in the January election.

Led by Anastacia Palaszczuk, the ALP came to power in Queensland less than one month ago on the back of a commitment to remove state subsidies for the Galilee coal and associated rail projects, ban Reef dumping, and ensure no dredging was undertaken at Abbot Point prior to financial close on any project.

But on Wednedsay – after announcing the withdrawal of plans to dump dredge spoils dangerously near to the Reef – state development minister Anthony Lynham described the Galilee coal projects as “vital” to the state’s economy, and said the government would do everything it could, short of providing funding, to promote them – including pushing for federal environmental approval for the new dredge dumping plan within the next four months.

Palaszczuk described the deal as an “environmentally sustainable and fiscally responsible” proposal for the expansion of the Abbot Point Coal Terminal. She described it as  “the only responsible way to proceed with the Abbot Point development to ensure it is ready for future exports from the Galilee Basin.”

Green groups have reacted swiftly, arguing that the new dredge proposal, though better than the old one, remains unacceptable, particularly considering it is for purposes of digging up, shipping and burning coal – the biggest threat to climate change.

“Any new proposal to pave the way for more coal mining is simply offensive,” said Greenpeace Reef campaigner Shani Tager.Save the reef

“Premier Palaszczuk’s plans will pave the way for construction of up to nine new coal mines, accelerating climate change and ocean acidification – processes that will turn the Great Barrier Reef into a coral graveyard.

The Australian Greens, meanwhile, have responded to the news by calling on the Australian Securities and Investments Commission to investigate the ownership of the Abbot Point coal port and Carmichael coal mine projects.

“I’ve written to ASIC seeking an urgent investigation into which entity owns these massive projects threatening our Reef and climate,” Senator Larissa Waters, Australian Greens environment spokesperson, said in a statement on Thursday.

“They appear to be handing over the safety of the Reef to shell companies registered in Singapore and the Cayman Islands,” Waters said.

“Both Labor and the Liberals so are wedded to coal, rather than transitioning to renewables, that they’re looking the other way on Adani’s murky ownership and taxation arrangements.

Certainly, Labor’s unexpected support of the coal projects flies in the face of analyst warnings that the proposed mines are, quite simply, uneconomic.

As energy analyst Tim Buckley wrote here in January, the election result had been expected to return the focus of Adani’s $15 billion Carmichael proposal to the “key questions of financial viability and strategic logic in the face of the structural decline of seaborne thermal coal markets.”

Buckley, who describes the commercial viability of Adani’s Carmichael proposal – without government support – as “highly questionable”, has long argued that there is no market for Gaililee coal, not even in energy poor India.

“The 60 per cent decline in coal prices over the last four years reflects significant oversupply and weaker than expected demand,” he said.

“Flooding the seaborne coal market with a further 30% increase in global supply is against Australia’s national interests.”

It is also against the interests of many of Australia’s major trading partners, he adds, to mine the remote and lower quality coal of the Galilee Basin in the face of increasing global action on climate change.

Indeed, a total of nine global banking groups – including US giants Citigroup, Goldman Sachs, and JPMorgan – have formally declared they will not finance the proposed coal projects and export terminals in light of the associated environmental and economic impact.

And in China, where some predict demand for imported coal could halve by 2020, the huge popularity of a new documentary about air pollution has moved analysts at Merrill Lynch to warn investors about the film’s potential impact on coal miners and generators, if it leads to increased Chinese government efforts to reduce coal consumption and promote alternative energy.

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  1. Beat Odermatt 6 years ago

    It shows that parties such as Labor do not want renewable energy after all. All the hypocritical bullshit about caring for the environment is quickly forgotten after they won the election.

    • Steve Young 6 years ago

      The government said before the election it would not allow dumping on the reef and would not provide any financial assistance. After the election the government isn’t allowing dumping on the reef and isn’t providing any financial assistance. So what exactly is the problem?

      If this project is not financially viable, as claimed by Tim Buckley, it will not go ahead (as it will not secure finance). The idea that governments can ignore planning laws and ban a project because it feels like, shows a poor understanding of our legal system.

      • Beat Odermatt 6 years ago

        The ALP looks like still being the mother of broken promises. Voters don’t want the ALP to find excuses to break promises. Australia has sufficient free renewable resources and does not to need to burn resources needed by future generations. Australia has a responsibility to do so. You know and I know, the ALP has no choice but to break promises as it has to obey the orders of the Trades and Labour Council.

        • Alastair Leith 6 years ago

          I think you’ve been asleep during the ICAC hearings Beat. Your 1950s view on the world is really getting pretty tired you know.

          • Beat Odermatt 6 years ago

            No, 2015 realities. In fact can you blame the coal mining workers fighting for their jobs? Many of these workers will have great difficulties finding jobs in Central Queensland. The ALP is using real politics and is in an difficult position. The reality is that countries or States relying on coal as the main driver of economic activities such as Poland and Queensland have very difficult decisions to make. South Australia which had already sold its electricity assets the move towards wind and solar is a win-win for all. The Newman Government found out that in some cases it is a lot easier to be opposition then to be in Government.

      • Alastair Leith 6 years ago

        Change of tune though. Don’t recall ALP saying how the Galilee project was of vital significance to QLDs future before the election. Now they are it’s no1 fan. Just shows ALP doesn’t get Climate Change urgency and doesn’t get the benefits, to climate and our economy, of RE and EE expansion.

  2. Miles Harding 6 years ago

    I’m not sure what Lynham means by “vital to the state’s economy”.

    He must be reading a completely different set of reports to the ones I’ve seen.
    Public pressure on the Chinese government to clean up the air in cities can’t be good for coal exporters like us.
    India has publicly indicated that they wish to cease coal imports within two or three years.
    Most victims of natural disasters in the third world list man made climate change among their top reasons why they are being forced from their homes and livelihoods.

    It’s not looking like his present course of action is going to leave the state economy with very many vital signs, possibly none at all.

  3. Colin Nicholson 6 years ago

    If the business case is not sound, then the coal will not be mined, and a much greater point will have been proven than simply banning Adani. So which cards will Adani play now? Have they got sufficient assurance on return from investment to play the next card. Qld could make a neat pile of cash here and not export a kilo of new coal

    • Chris Baker 6 years ago

      Good point Colin, it may have been interesting for them before, when Newman was ready to bend over backwards to help them with Queendlander’s money. But now Adani will have to fund it on a commercial basis, they will run the numbers and they won’t be stupid about it. So yes, which card will they play next…

      • Askgerbil Now 6 years ago

        The business case is not so simple when major investors are also importers of exported coal, the manufacturers of bulk coal carriers and exporters of coal-fired power stations. These investors, such as Cockatoo Coal’s POSCO and KEPCO, can boost coal production with a view to depressing coal prices, and even making a loss on coal mining in Australia. The entire transaction can still be profitable when those investors lift profits in their related downstream business operations (POSCO – South Korean steel, KEPCO – South Korean electricity) with cut-price coal as an input.

        One effect is that they avoid paying tax in Australia. …

        • Colin Nicholson 6 years ago

          To a certain extent that may be true, but coal is a victim of its own cheapness. So they reduce the price of wholesale electricity by 25%, where does that get them? Another 10 years maybe …. and what then? another price cut. These chaps are banking on massive electricity grids being built across the developing nations for centralised systems. They are banking on expansion of the coal electricity market. If the numbers add up for that massive infrastructure,then, they will do it. The task of renewables is to ensure that its competetiveness stops those numbers from adding up

          • Askgerbil Now 6 years ago

            Japan is not just banking on massive electricity grids connecting coal-fired power plants. It is offering investment funds to developing countries to build coal-fired power plants manufactured by Japanese industry. “Japan Defends Use of UN Climate Fund for Coal-fired power Projects Abroad” – http://www.bloomberg.com/news/articles/2014-12-04/japan-defends-use-of-climate-finance-for-coal-projects-abroad and “Japan Boosts Support For Coal-Fired Power Plants Built Overseas”

            Cut-price coal is a selling point.

            After these coal-fired plants are built, Japan can cut back on production of coal from its Indonesian and Australian coal mines. The developing economies are then stuck with Japanese-funded coal-fired power stations that will operate for over 40 years.

            South Korean steel giant POSCO announced on January 29 it had posted US$2.9393 billion in operating profits and US$509.1 million in net profits for 2014 ( http://www.businesskorea.co.kr/article/8832/better-expected-posco-hyundai-steel-shake-difficulties )
            It doesn’t need to make a profit, ever, on the coal that it mines in Australia and sells to itself.

  4. Connor Moran 6 years ago

    Politicians are not going to (or not able to) help. They haven’t be inclined to for years. We’re going to have to do it on the ground ourselves by ensuring renewables continue to destroy the fossil fuel business model.

    • strez2Dmax 6 years ago

      Yes. Sad. But you are right, politicians in Australia today rate little better than dog shit on your new wool carpet. Time for all those fair dinkum ones to get fair dinkum, cut your home energy consumption to the bone and flick the grid. Now.
      Get your superannuation out of filthy companies. Now. Can do ?

      • Connor Moran 6 years ago

        We’re on a project to go off-grid right now. I also have a Tesla on order, no idea how to make the payments, but somehow we’ll get there! 😉

        • Beat Odermatt 6 years ago

          Going off-grid may be tempting and may be a good solution in isolated areas. I prefer to remain to be connected to the grid as I can use electricity made by renewable energy. The grid also allows people with rooftop solar to export clean energy to their neighbours. What has to stop is the distribution rip-off.

          • Connor Moran 6 years ago

            I would be in favour of, and idea we are trying to get the idea off the ground, but community grids.

          • Beat Odermatt 6 years ago

            Yes, give it a go.

  5. Edward Borland 6 years ago

    Labor.. So sad. Ignoring the conclusions of the Great Barrier Reef Marine Park Authority and the 2014 Great Barrier Reef outlook report. Adani’s environmental track record, employee abuse, its special relationship with the Indian PM, the low price of coal and our atmosphere going past 400ppm of CO2 means supporting this project is irresponsible and reckless. Why invest in developing a stranded asset?

  6. Rob G 6 years ago

    Very disappointing. Quick money again trumps all other considerations. If Labor are unable to take a positive stand against coal then they are no different to the LIBs and we have no choice but to vote Green. As a country we are cursed with an abundance of coal.

    • Beat Odermatt 6 years ago

      No, people will be able to vote for the Renewable Energy Party at next elections. They can vote for sensible Governments without having to sell out to polluters or left wing loonies.

      • Pedro 6 years ago

        Prefer “left wing loonies” to what we have at the moment. If you care to take a look at Greens policies it is pretty sensible main stream stuff based on ethics and evidence.

        I am most impressed by the Greens urban development policy, basically medium density development along public transport hubs which is basically what they have been doing in progressive Euro cities for decades.

        • Beat Odermatt 6 years ago

          I am not talking about environmental policies of the Greens. Some of them are supported by many sensible people. I am talking about their lunatic policies on other issues.

          • Alastair Leith 6 years ago

            Such as? It’s the policies of the German Greens that mean solarPV and wind are as cheap as they are today. And the Renewable Energy Party sounds like a cynical attempt to divide the Greens vote which would play into the hands of Palmer Party. I doubt many environmental or solar advocacy groups will be backing the REP come the next federal election.

          • Beat Odermatt 6 years ago

            The Greens are harmful to the environment because their lunatic social and economic policies. People with common sense are unable to vote for the Greens.

          • Beat Odermatt 6 years ago

            I don’t think that this forum is big enough to discuss the lunatic social and economic policies of the Greens. The Greens have some reasonable good environmental policies, but their main aim of creating a nihilistic society denies them the support by the majority of people.

      • Rob G 6 years ago

        Currently there appears to be a lot more common sense coming from our left side, the tired old mantra that these parties cannot manage the economy etc is just that -tired and old. Every day we watch another story unfold from our right wing looney government. We used to laugh at Americans who put right wing nutter George W Bush into power, now they laugh at us.

        Renewables around the world are supported by both sides of politics – sadly they are not here.

        • Beat Odermatt 6 years ago

          I am sure there is nothing worse than the Rudd and Brown government which wasted Billions to support a criminal people smuggling industry. Kevin Rudd and Bob Brown caused the death of so many innocent asylum seekers. The Greens have nothing to be proud of.

          • Rob G 6 years ago

            Sounds like you’ve taken this straight from the Tony Abbott of rhetoric. Rudd was Australia’s most popular PM in 2007. Abbott is currently Australia’s most hated PM (in history). I’d trade Abbott for Bob Brown any day! We’ve had the worst with Abbott, anyone else would be an improvement.

          • Beat Odermatt 6 years ago

            Popular yes until most people woke up to the fact that popularity is one thing but ruining Australia another. He was a rude and selfish man with no understanding of how to run a country. He should have spent less time looking at himself in front of a mirror but trying to understand some basic economics.

          • Rob G 6 years ago

            Yes Rudd had an ego problem and it cost the party. The same will happen to Abbott.

          • Beat Odermatt 6 years ago

            I agree. With Rudd and Abbott, unsuitable advisers make the situation even worse.

  7. Blind Freddy of Cairns 6 years ago

    Sorry but the climate will benefit from the development of the Galilee and Tim Buckley is an anti coal campaigner and will always say that it does not economically stack up right up to the point that 20,000 workers are employed and they make money from these projects. You only have to look at the tender of coal blocks in India where they are paying over USD35 pmt just to have the right to mine coal. The anti coal groups will bemoan the climate impact, however the coal to be mined in the Galilee is far better than the rubbish they will burn from Indian mines, therefore, whilst the world transitions to renewables and coal remains part of the energy mix, better to burn good quality Aussie coal.

    • Beat Odermatt 6 years ago

      India has the capacity and urgent need to move away from coal. India has enough renewable energy to provide the countries energy needs without having to dig up more coal. The current Government of India is pushing for clean energy for all. I am sure India prefers that all the damage is done in Australia.

    • Coley 6 years ago

      And if the barrier reef is destroyed in the process? tough, 20 000 workers keep their jobs for a few more years.
      Short sightedness at its worst.

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