Adani's $16 bn Carmichael coal project gets nod. But here are the conditions

Australian government todaycleared the proposed $16.5 billion Carmichael coal mineproject of the Indian conglomerate Adani Mining in the GalileeBasin in central Queensland.

The go ahead for the project expected to provide electricity for up to 100million people in India

The approval was announced by Environment Minister GregHunt, who said “after undertaking a thorough assessment andconsideration under national environment law, I have approvedthe Carmichael Coal Mine and Rail Infrastructure project,subject to 36 strict conditions”.

Strict conditions imposed will ensure protection of environment, says Aus environment minister

“The absolute strictest of conditions have been imposedto ensure the protection of the environment, with a specific focus on the protection of groundwater.“These 36 conditions complement the conditions imposed bythe Queensland Government, and will ensure the proponent meetsthe highest environmental standards and that all impacts,including cumulative impacts, are avoided, mitigated oroffset,” Hunt said.

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Hunt said a rigorous, open and thorough environmentalassessment process was undertaken to take account of the public interest in the project and that he visited theproposed site to better understand the project and met withthe local community to understand their views.The project, which was proposed and advanced under theprevious state and federal ALP Governments, is estimated tohave a resource value of $5 billion per annum over 60years.

At full export capacity, the project is expected tocontribute almost $930 million to the Mackay region’s gross regional product and $2.97 billion to the Queenslandeconomy each year for the next 60 years.It will generate an estimated 2475 construction jobs and afurther 3920 jobs during the operations phase, he said.

The project has a life time resource value of at least $300 billion, and will enhance economic developmentopportunities throughout the region through indirectemployment and training, and contract and supplyopportunities.It is estimated the project will provide electricity forup to 100 million people in India, Hunt added.

The strict conditions will ensure the protection of theenvironment as a paramount concern, Hunt said.The comprehensive assessment of this project took intoaccount advice from the Independent Expert ScientificCommittee on Coal Seam Gas and Large Coal Mining Development(IESC).

“I personally visited the site with the head of theIESC, and have incorporated all of her suggestions in theconditions. Any matters raised by the Independent Expert Scientific Committee were met with further and strengthened conditions, including requirements for a review of the groundwater flowmodel and measures to protect the Great Artesian Basin,” he said.

Gautam Adani hails approval

Hailing the decision, Adani Chairman, Gautam Adani said:” We welcome the Minister’s approval of the Carmichael Mineand Rail project, which takes us another step closer todelivering our multi-billion dollar mine, rail and port development".

Adani group, in a statement said: “The approvalannouncement by the Minister for the Environment, Greg Hunt,marks another significant milestone for Adani’s CarmichaelCoal Mine and Rail Project, after having received approvalfrom the Queensland Coordinator General on May 7th this year.”

Details of the conditions being imposed on the project

The strict conditions being imposed included ensuring that a minimum of 730 megalitres of water are returned to the Great Artesian Basin every year for five years and adaptively managing uncleared habitat to address potential subsidence impacts and groundwater changes. It also includes offsetting impacts from cleared habitat and reviewing offset requirements if uncleared habitat is subsequently impacted through subsidence or groundwater changes and contributing funding to address cumulative impacts to threatened species and communities.

Minister Hunt’s approval follows Adani’s recentannouncement of Korean firm POSCO E&C as the company’s railpartner for the vital 388km North Gallilee Basin Rail (NGBR).

Adani said the company was fully committed to adhering tothe strict regulatory and environmental approval processesthat apply to all of its planned projects.

Criticism against Adani’s coal project

The latest development has been criticised byenvironmentalists who said Australia’s biggest coal mine,Adani’s Carmichael Coal and Rail Project in Queensland’sGalilee Basin, was approved despite “mounting evidencedemonstrating the project was economically unviable.”

Tim Buckley, Director of Energy Finance Studies,Australasia, for the Institute for Energy Economics andFinancial Analysis (IEEFA) who spent many years studying theeconomic viability of energy projects and companies, with aparticular focus on the Galilee basin projects, also commentedon the project.

He said: “It’s not surprising that Minister Hunt is goingalong with Premier Newman and Prime Minister Tony Abbott’sdesire to facilitate foreign firms in their efforts to try toprop up Australia’s declining coal industry. “Ironically, if this project proceeds, it will actuallyaccelerate the longer term destruction of Australia’scoal export industry by dramatically expanding the capitalinvested whilst at the same time driving coal prices downglobally,” he said.“Global coal prices are already depressed due to excesssupply. If the Carmichael project proceeds, it will
potentially open up access to another nine mine proposals witha combined thermal coal capacity of up to 300 million tonnesper annum.

“Our analysis forecasts that this would drive downthermal coal export prices a further 10-20%, thereby squeezingcoal sector profit margins which are already down to zero,“Buckley said.

PTI