It’s now three months since the election, and two months since Adani got (what were supposed to be) the final approvals for its Carmichael mine-rail-port project. In fact, it appears that some approvals, such as the lease lease on Moray Downs land for the workers camp and airport haven’t been finalised, though this is supposed to happen soon. More significantly, Adani has yet to negotiate access to the Queensland rail network, owned by Aurizon (formerly the publicly owned QR). Aurizon is coming under pressure from the public, and from large shareholders, to limit assistance to what is legally required.
Despite these remaining delays, the rhetoric we heard from Adani and its backers, suggests the project ought to be well under way by now, with thousands of jobs on offer. In reality, there are just 10 Adani jobs currently (24 August) on the company’s jobs portal. The total number advertised since the election is no more than 100, not even enough to offset cuts made last year.
It’s possible that this is simply a steady and orderly process of development on Adani’s part. If so, they company need to pick up the pace soon if it is going to start exporting coal by 2021, as claimed.
Alternatively, it may be that pressure to stop new coal projects has left Adani without partners for crucial parts of its work. I wrote a piece about this, with specific reference to insurance. As the number of insurers will to back new and existing coal mines shrinks, the costs are bound to increase.
Going beyond insurance, press reports suggest that GHD is doing the rail design work, and incurring significant reputational costs as a result. Given the unhappy experience of previous engineering contractors like Worley Parsons and AECOM, it’s surprising a firm with an eye to the future would pick up such a poisoned chalice.
That seems to be the view of another big engineering firm, Aurecon, which just announced a break with Adani. They copped abuse from resources minister Matt Canavan, but presumably judge that Aurecon will be around long after Canavan is gone, and that the long term costs of planetary vandalism is too much to bear.
Then there’s the operation of the railway. Aurizon seems unlikely to take it on, and another big operator, Genesee & Wyoming Australiahas said they won’t touch it. That leaves foreign owned Pacific National. Among its owners, is the Canada Pension Plan Investment Board, which is also coming under pressure to divest from fossil fuels.
A final possibility is that the ultimate owner, Gautam Adani is still playing for time, hoping to extract yet more government support before committing billions of dollars of his own money to a project that can’t possibly be sustained in commercial terms. As the Institute for Energy Economics and Financial Analysis (IEEFA) has shown, the whole plan now depends on a crony capitalist deal involving Adani, his close friend Indian PM Modi and the government of Bangladesh. Even so, without more financial support from Australian governments, it’s hard to see the project paying off. And it’s at least possible that part of the deal, now being challenged in Indian courts, will fall over.
While Adani has received most of the attention, it’s important to link it to the broader campaign to stop all new and expanded thermal coal mines. An important example, is the ironically named New Hope mine at Acland in the Darling Downs, where a final decision is likely soon.
Future work: I’m planning to do an analysis of what’s needed, in social and economic terms, for a transition away from coal in Queensland. My preliminary conclusion is that the costs of managing this properly, as Germany has done, will not be great.