Why are we still pursuing the Adani Carmichael mine?

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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?

AAP Image/Cameron Laird
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The Conversation

Queensland Premier Annastacia Palaszczuk and Gautam Adani are still resolved to press ahead with the Carmichael mine, with taxpayers’ help. AAP Image/Cameron Laird
Queensland Premier Annastacia Palaszczuk and Gautam Adani are still resolved to press ahead with the Carmichael mine, with taxpayers’ help. AAP Image/Cameron Laird

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.

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.

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.

The ConversationMy 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.


Source: The Conversation. Reproduced with permission.

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  1. D. John Hunwick 2 years ago

    ADANI – Australia Doesn’t Actually Need ‘Im

  2. Joe 2 years ago

    Both Labor and The Liberals are as bad as each other in The Adani Grubfest…my label.
    The 4 Corners revelations should serve a warning to everyone…’Stop Adani’. Besides the economics making no economic sense, sources of potential finance have decided the project is dead but our Governments insist it is alive. Those ‘10,000 jobs’ always spruiked by our pollies and Rupert’s newsrags are ‘1464 jobs’ on Adani’s so say in Court….and probably fewer as automation is progressively implemented. But the things that really anger me about this whole project is how environmental issues are just waved away by all authorities concerned. They all now better. And the most painful for me to see is how Our First Australians, the traditional landholders, have had their Native Title Rights quashed by a grubby political alliance of Labor and The COALition in The Senate to give Adani Mega Coalmine legal approval. Shame on you ALL.

  3. Adam Lucas 2 years ago

    Great story, Michael. John Quiggan from UQ had some interesting things to say about all this a few months ago.

  4. Ken Dyer 2 years ago

    I think that a point that needs to be made is that neither Federal or State Governments have paid any money out yet. That is to their credit. Although both have provided approvals for the mine to proceed and to use groundwater, this will not happen until the mine commences operations and starts producing.

    However, the mine is unviable and becomes more unviable by the day. It is already a stranded asset, and Adani faces huge debts when the farce unravels. The House of Cards report from IEEFA explains:


    However, this has not stopped the perpetuation of the cargo cult myth that the Carmichael mine will bring jobs. The councils of Rockhampton and Townsville have been comprehensively conned by Adani to spend 15.5 million dollars of ratepayers money to build an airstrip for fly in workers, thus perpetuating the myth that in the future the mine will actually come into being, a reality that was first postponed in 2014 and recedes further by the day.

    Adani’s main strategic business is in India where they have invested $30billion. Adani is hoping that they can start the mine then somehow hold the Australian governments liable to bail them out when it fails thus avoiding large financial hits to their balance sheets. They are playing a long game, and so far, are winning. Our compliant politicians have no leverage or defence against the clever and devious Adani tactics, whose ability to bribe and corrupt government was revealed by the Four Corners report from India.

  5. Robin_Harrison 2 years ago

    Why? Because they are politicians and all politicians of any influence on either side are wholly owned puppets. Unprincipled, lying thieves the lot of them.

  6. Ken 2 years ago

    1. Adani holding the Carmichael project on their books as an ‘asset’.
    The company is heavily indebted,, and if they remove this ‘asset’ from their balance sheet they will technically be bankrupt ?

    2. Its a labour seat and the state govt want to hold it,, plus they are only focused on jobs for that region, and not concerned about long term environmental issues ?

  7. Radbug 2 years ago

    It’s pathetic. All this money, all this political effort, in return for so much hot air. It only goes to show that money is absurdly cheap nowadays. Nemesis is coming.

  8. Vicki Stevens 2 years ago

    My thoughts are that our politicians know (come on, they really can’t be that dumb), that this coal mine and rail link are dead in the water, they know the economics,they know the divesting away from coal of large corporations and investors, they know the insidious, corrupt reputation of Adani and his companies (way before 4Corners expose), but are quietly enjoying handsome bribes for as long as they can get them. The question is: do they know already that they will pull the pin on this lying fraud, but only when the noise of opposition has grown to loud from everyday Australians, which gives them a way out? or are they really dumb, and Adani has told them they will have royalties paid to them til the day they die, if they allow this utterly destructive mine go ahead? My bet – they’re stringing him along, it will be political suicide for them if it goes ahead. (Not that they will mind, especially Annastacia, she must be setting herself up really well with dirty money for life after politics!)

  9. Ian 2 years ago

    Find the political party’s accounts in Singapore and you will have found the answers you are looking for. You’ll probably find millions worth of other answers too.

  10. Ross Flint 2 years ago

    Could this be a possible explanation – To be elected / re-elected, parties of all persuasions – both State and Federal, with the exception of the Greens, believe they need the vote of the Qld. electorate. Therefore will will give them, ie. the Qld. electorate, the coal mine that will be the “biggest’ in the world, that will provide them with “10,000” jobs and create an economic boom for them. So the 2 big parties are willing to pork barrel Qld. and pander to them. What do the Qld polls say on the subject of what Queenslanders believe on this subject? Do Queenslanders really believe all this spin?

    • technerdx6000 2 years ago

      Unfortunately it seems as though they do believe in all this spin. Massive unemployment in northern Queensland and they can’t see past jobs. I’m a Queenslander and I can’t comprehend how blind people are

  11. George Darroch 2 years ago

    Ken Dyer said it well below: pure cargo cultism.

    (Cargo cults were tribes that believed if they built runways then gifts would come from the sky.)

  12. solarguy 2 years ago

    Jesus Christ these pollies really have so much integrity NOT!

    I couldn’t sleep at night, if I took dirty money and knowing the destruction to the land and the people my greed would be unleashing.

    SHAME to all in the government involved. Bastards.

  13. hugh grant 2 years ago

    Great summary of this farce Michael. It beggars belief that a Labor government is continuing to attempt to con us into believing that its in the Queensland community’s interests to fund a billionaire corporate crook and environmental vandal

  14. Roger Brown 2 years ago

    Big Gina might have a use of the rail line too ?

  15. RobertO 2 years ago

    And do not forget that any farmers (grain of other type) will be able to use the “Railway Line” after they have paid their $2.00 per ton to the Adani Raillway Company in the Cayman Islands. Are our Australian pollies so stupid? A little calulation shows that Mining at Adani will be 25 people per 1000 tons moved (EPA court case V Adani and 1456 FTE jobs moving 60,000 tons) and Adani wants to automate the process Mine to the Port = even less people employed.
    I got to admit Anna P looked realy good on Four Corners with her statement “It will employ 10,000 people!” (ability to lie, cheat and steal are a requirments for our pollies).
    We have the world’s greatest pollies in Australia (even beats Trump and his “Fake News”?)

  16. Ken Fabian 2 years ago

    Perhaps waiting for Adani to pull the plug rather than pull it themselves? Too much invested – public funds as well as PR – to be able to back out without admitting they’d made a serious mistake supporting this mining project.

    Responsibility avoidance rather than responsibility taking – unfortunately – has become a fundamental skill for a successful political leader.

  17. trackdaze 2 years ago

    Having visited FNQ twice this year the coverage in the newspapers (Murdoch) is surprise surprise overwhelmingly pro Adani.


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