Adani Carmichael Mine: The numbers don't stack up

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With the evidence mounting against the viability of the proposed Carmichael mine, the obvious choice is to simply stop the project (Image via Australian Mining‏ / @ozmining)

The proposed Adani Carmichael coal mine has been touted as the economic saviour of Central and Northern Queensland, but the numbers say otherwise. Arthur Marusevich considers the project rationally.

WHEN THINKING about the potential impact of the proposed Adani Carmichael coal mine on the environment, one’s vision is instantly transformed to the sight of the drought-ridden, violently excavated and ravished landscapes portrayed in Al Gore’s 2006 documentary, An Inconvenient Truth. But whether you believe in climate change or not, the truth is, the proposed Adani mine will achieve anything but what it is advertised to achieve.

What is the Adani project all about?

The proposed Adani Carmichael mine is the biggest project of its kind in Australia. It includes six open cut pits and five underground coal mines, over a 30 kilometre distance. The coal resource on the proposed site is over 10 billion tonnes. But although Adani has plans to operate the mine for over 60 years to mine an estimated 2.3 billion tonnes of coal, the current approval is capped at 60 million tonnes per annum (Mtpa) of coal for the next 30 years.

To transport the coal, Adani is seeking a loan $1 billion from the Australian Government to build the North Galilee Basin Rail Project. The 388 kilometre stretch of rail line will connect the remote mine to Adani's Abbot Point port in North Queensland, from where the coal will be shipped off to India.

However, the crucial question to be answered is: how beneficial is this project to Australia or the rest of the world, for that matter of fact? Unsurprisingly, it’s not.

The 10,000 jobs tale

Time and time again, we have been told that the Adani mine will create 10,000 jobs in Australia. This is not true.

In an affidavit to the Queensland Land Court (page 15), Adani’s expert witness Jerome Gregory Fahrer, director of ACIL Allen, admitted that:

'Over the life of the Project it is projected that on average around 1,464 employee years of full time equivalent direct and indirect jobs will be created.'

This actually makes sense because Queensland employs only around 20,000 coal miners, which accounts for about 1% of Queensland’s 2 million workforce. In fact, ACIL Allen, Australia’s largest independent consulting firm, predicts that the proposed Adani coal mine will reduce employment in manufacturing, agriculture and other mining projects by around 1,400 jobs. As a result, the 10,000 jobs number appears to be a contrived figure at best.

Banks are reluctant to fund the project

Realising the unrealistic future of energy produced from coal, many banks, both foreign and Australian, have distanced themselves from funding the Adani project.

To date, 14 banks have rejected Adani’s loan applications and this is likely that this number will continue to increase. But despite this discouraging sign, there are some who still argue that Australian coal is cleaner and energy efficient, hence why the Adani project must go ahead.

The quality of the coal

No doubt about it, Australian coal is one of the most energy-efficient and cleanest in the world. Unfortunately, this is not the case with the proposed Carmichael mine. Those who think it is have been misled.

The high energy, clean coal is already being mined in the Hunter Valley and Bowen Basin. The energy content of the proposed Carmichael coal is only 4,950Kcal compared to the benchmark sub-bituminous and bituminous coals that average 6,000Kcal. This means that the ash content of the proposed Carmichael coal is relatively high — estimated to be 26%, more than double the average of 12% of Australian thermal coal.

This makes the Carmichael coal only 10% above the average quality of domestic Indian thermal coal in terms of energy content. Yet, ironically, this third-grade coal is destined for India.

Environmental impacts if Adani goes ahead

Australia is already number 16 on the world’s list of worst carbon dioxide emitters. If Adani goes ahead, the mine on its own will rank Australia in the top 15 worst emitting nations in the world. As a result, increased use of coal will not only increase poverty but will also devastate the environment to an irreversible state: the vulnerable Great Barrier Reef, Queensland’s springs, aquatic species, wildlife, forests — all damaged or destroyed.

For those of you who do not believe this, at the very least, look at Adani’s environmental track record. India’s former environment minister, economist Jairam Ramesh, is himself surprised at the decision to grant Adani such favourable environmental approvals and mining licenses.

Mr Ramesh is concerned by the fact that since Adani has such a poor environmental track record in India, there is no reason that it won’t be the same elsewhere:

"You're giving a tax break to a project that is actually going to have adverse environmental consequences, which will have multiplying effects on weather patterns in the region, across the world. I find it bizarre."

So, if coal-reliant India understands the importance of a renewable future, why doesn’t Australia?

Renewable energy is the way forward — not just for the sake of saying it

Did you know that solar energy is now cheaper in India than coal?

For instance, in 2015/16, the tariff bids reached as low as US$65 per MWh and it is forecasted to fall to US$50 per MWh in the next three years. Yet, the imported Carmichael coal to fire India’s outdated and inefficient power stations will cost almost double the solar tariff, at US$90 per MWh.

There is absolutely no doubt whatsoever that the decline in renewable costs means that they are the cheapest and quickest solution to India’s electricity-poor households. The proposed Carmichael coal is not the solution. It is merely a leaky patch which will only prevent the world from meeting its emissions targets and further destroy vulnerable ecosystems.

So, with all the evidence mounting against the viability of the proposed Carmichael mine, the obvious choice is to simply scrap the project.

If we truly care about the environment and the survival of the people of India, we would offer readily available and cheaper renewable energy solutions. And this is not the voice of another greenie — it’s just the rational thing to do.

Arthur Marusevich is a Canberra-based lawyer.

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