Adani's promise of jobs doesn't add up

Despite being massively subsidised by the Queensland Government, it appears the Adani mine in central Queensland could be employing as few as 300 production staff.

A spokesperson for the Mining and Energy Union said:

“Our understanding is that there are currently approximately 300 production employees employed through labour-hire firm Mackellar, expected to ramp up as the mine becomes more fully operational.”

*Independent Australia twice asked Bravus Mining and Resources (Adani's new name in Queensland) how many full-time jobs had been created at the mine. It refused to answer.

In 2017, in a joint media release with Premier Annastacia Palaszczuk, Adani committed to generating 10,000 direct/indirect jobs in Queensland.

Two years later, the Premier told Parliament:

“The company has promised 1,500 direct jobs and 6,700 indirect jobs, mostly in Rockhampton and Townsville. I expect Adani to live up to that promise. I am determined that they will.”

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This was despite the company's own economist providing an affidavit at a land court in 2015 that the project would create pnly 483 jobs in central Queensland and 723 in the rest of the state.

And this was at a time when the analysis was dealing with an annual output of 40 million tonnes a year instead of the new plan to produce 10 million tonnes of coal per annum.

Despite the company announcing that the mine would not require “a cent of Australian taxpayer dollars” and would be ‘100 per cent financed through the Adani Group’s resources’, the Queensland Government is subsidising the project through a long-term royalties deal.

At a time when the Government needs every cent it can earn to pay for flood restoration, the company is able to withhold hundreds of millions of dollars from the state's coffers every year.

The Royalty Deferral and Repayment Agreement with the company was created under the State Government's Resources Regional Development Framework which requires job creation, common user infrastructure and a positive impact on the state’s finances.

In March 2017, Adani announced the project would generate:

‘...around $22 billion in state mining taxes and royalties in just the first half of the project life. This will assist much needed public funding to help deliver schools, hospitals, roads and other services and stimulate activity throughout the economy.’

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So using the company's own figures, how much should Bravus be paying in royalties each year?

The mine's life was projected to produce 40 million tonnes of coal for 60 years, meaning that the $22 billion was due to be paid in the first 30 years.

Adjustments to this forecast need to be made because the price of thermal coal more than doubled between March 2017 and January this year (from $106.6 million a tonne to $274.2 million) and projected output has been cut by a quarter to 10 million tonnes.

The $22 billion becomes $56.32 billion to account for the price difference and, in turn, $14 billion to account for the drop in output.

The analysis of taxes and royalties presented to the land court in Attachment B in 2015 shows a ratio of roughly $2 in royalties to every $3 in taxes for much of the period.

Of the $14 billion total, that would be about $2.8 billion in royalties, meaning that over 30 years, Queensland is missing out on more than $93 million in royalties every year for the length of the agreement.

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It would mean that if the figure of 300 jobs is correct, Queenslanders are subsidising every job at the mine by more than $300,000 for every year of the agreement.

An ABC investigation in 2017 suggested the agreement would see Adani pay just $2 million a year in royalties.

Among other questions not answered by Bravus were:

Given that the venture “stacked up financially”, “would not require a cent of taxpayers' dollars” and you did “not want any special favours”, why did Adani/Bravus negotiate with the Queensland Government to delay the payment of millions of dollars in royalties for a period of several years?

 

Will I be correct in writing in my article that Bravus is not paying any royalties at the moment?

The deal means the company will have to pay the royalties at some stage in the future but how and when is a secret.

At a time when the Queensland Government needs to find $1 billion to repair public infrastructure the ‘much needed public funding’ from Bravus will not be available.

* EDITOR'S NOTE:

As mentioned above, Independent Australia twice asked Bravus Mining and Resources how many full-time jobs had been created at the mine but they did not answer the question.

A spokesperson, however, provided the following responses, which they have asked us to publish in full:

From: Bravus Media <media@bravus.com.au> 
Sent: Wednesday, 30 March 2022 2:34 PM
To: Stephen Bishop; IA Editor 

We have nothing more to add our response, thanks.

 

ON BACKGROUND

 

Here FYI is a link to a Queensland Government Ministerial media statement you may find of interest: Royalties agreement set to supercharge Century Zinc Mine restart - Ministerial Media Statements

This refers to the Resources Regional Development Framework, which was announced in 2017, and applicable to new resource projects in the North-West Minerals Province and Galilee and Surat basins.

Steve Bishop is a journalist and author. You can read more from Steve at stevebishop.net. 

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