Carmichael coal mine
The Carmichael coal mine is a thermal coal mine in the north of the Galilee Basin in Central Queensland, Australia, approved by the Queensland and federal Australian governments. Mining was planned to be conducted by both open-cut and underground methods. The mine is proposed by Adani Mining, a wholly owned subsidiary of India's Adani Group. The development was initially intended to represent an AUD$16.5 billion investment, however, after being refused financing by over 30 financial institutions worldwide, Adani announced in 2018 that the mining operation would be downsized and self-funded to AUD$2bn., Adani is set to receive a seven-year royalty deferral worth $900m, and over $4.4 billion in total tax exemptions, deferrals and capital subsidies from Queensland taxpayers for the life of the Carmichael mine.
At peak capacity the mine would produce 60 million tonnes of coal a year, much of it "low quality, high ash". In court, Adani said in 2015 it expects the mine to produce 2.3 billion tonnes over 60 years. It would be the largest coal mine in Australia and one of the largest in the world. The mine would be the first of some large mines proposed for the Galilee Basin.
Exports are to leave the country via port facilities at Hay Point and Abbot Point after being transported to the coast via rail. The proposal includes a new 189 km rail line to connect with the existing Goonyella railway line. Most of the exported coal is planned to be shipped to India.
The mine has drawn immense controversy about its claimed economic benefits, its financial viability, plans for government subsidies and the damaging environmental impacts. Broadly, these have been described as its potential impact upon the Great Barrier Reef, groundwater at its site and its carbon emissions. The emissions from burning the amount of coal expected to be produced from this one mine, whether sourced from it or elsewhere, would, in a "worst-case" scenario be, "approximately 0.53-0.56% of the carbon budget that remains after 2015 to have a likely chance of not exceeding 2 degrees warming...over at least 60 years... Approval of the Mine, therefore, could be either consistent or inconsistent with the goal of limiting warming to 2 degrees, depending on a range of external factors..." according to Doctor Chris Taylor and Associate Professor Malte Meinshausen.
The project has faced multiple legal challenges including from the Australian Conservation Foundation, which has a legal challenge to the approval given to Adani by the federal Environment Minister relating to water. Greta Thunberg has drawn international attention to the mine. On 11 January 2020 Thunberg called on the German company Siemens to stop the delivery of railway equipment for the mine, but two days later Siemens said that it would continue to honour its contract with Adani.
The Queensland premier, Annastacia Palaszczuk, set 19 June 2019 as a deadline for final environmental approval of the project, and it was given state and federal approval on 13 June 2019.
Location
The mining lease mostly covers the Moray Downs cattle station. The majority of the mine lies within the Isaac Region, with a small portion in the Charters Towers Region local government area. Road access is made by the Gregory Developmental Road, an undeveloped section of the Gregory Highway.History
In 2010, the Queensland Premier Anna Bligh announced the Coordinator-General declared that the proposed Carmichael Coal Mine and Rail Project was being assessed as a 'Significant Project'. Since then proposal has gone through many changes. The operational life was originally proposed for 150 years, later reduced to 90 years and as of 2016 to 60 years.In May 2014, Queensland's Coordinator-General approved the project to proceed. 190 conditions were set by the state during both construction and operations phases of the mine with particular attention paid to groundwater and water bores which may be potentially affected.
In July 2014, federal Minister for Environment, Greg Hunt, approved the mine to proceed after 36 conditions were stipulated.
Exporting coal from the Carmichael mines requires new terminals and seabed dredging at the Abbot Point coal port. In early September 2014, the plan to dump dredge spoil in the Great Barrier Reef Marine Park area was scrapped. as it was widely criticised as damaging the fragile coral and seagrass ecosystem. Documents released under Freedom of Information showed Great Barrier Reef Marine Park Authority scientists had opposed the dumping plan., the Palaszczuk Queensland Government proposed to dump dredge spoil on land within the terminal site.
In August 2015, the federal Department of Environment and Adani signed consent orders in the Federal Court to set aside approval of the Carmichael project. The Department did not correctly follow requirements under federal environment law to consider conservation advice regarding two endangered species affected by the proposal, the yakka skink and the Ornamental snake. This led to considerable controversy. the Department was reconsidering the proposal.
By mid August 2015, Adani had ceased commercial relationships with a number of engineering contractors and banks.
Project size and operations
Mine
the mine planned to contain six open-cut pits and five underground mines. The surface disturbance area is. The mine site covers an area of, around, and is about long.Operations at the mine are expected to consume 12 billion litres of water each year. It is required to return only 6% of this water in the first five years. The mine will take a total of 297 billion litres of water from underground aquifers.
The Carmichael River runs through the middle of the mine site. Bridges and flood levees must be built before the Southern mines are constructed.
In the Queensland Land and Environment Court, Adani said it expected the mine to produce 2.3 billion tonnes of coal over 60 years. implying average production of around 40 million tonnes a year and according to the Environmental Impact Statement, 60 million tonnes of coal per year at peak capacity.
Rail line
Two parallel proposals for rail lines between the Carmichael mine and port facilities were floated during the planning process.In 2014, Adani signed an agreement with South Korean construction company POSCO to develop the North Galilee Basin Rail Project. This standard-gauge rail line would provide capacity of 100 million tonnes of coal per year, increasing access to the Galilee Basin. Authorities suggested the line be financed by the Northern Australia Infrastructure Facility, though the Queensland provincial government rejected a funding request in November 2017. In September 2018, Adani announced that it had abandoned plans to build the standard gauge line in favor of constructing a 1,067mm line to a connection with existing narrow-gauge trackage.
Queensland freight rail operator Aurizon had separate plans to develop narrow-gauge rail lines in the Galilee Basin to serve what it described as "several" entities planning mines in the area, including Carmichael, but with no firm agreements close to complete it withdrew a loan request from the NAIF in February 2018.
In January 2020, in response to protests in Berlin by Extinction Rebellion, Siemens announced it would re-evaluate its $20m contract to supply signaling systems for the rail link, but decided to continue with the contract saying there was "practically no legally and economically responsible way to unwind the contract without neglecting fiduciary duties."
Port expansion
The mine requires a significant expansion of port facilities. Deutsche Bank and HSBC declined to fund the Abbot Point port expansion due to environmental concerns affecting their reputation.Labour accommodation and infrastructure
In October 2017, Adani announced that Rockhampton and Townsville will both be used as bases for the expected labour, on a fly-in fly-out basis. In the same date, the councils of both cities announced investments for a new airstrip close to the mining site to allow the transit from the proposed hubs, with up to 31 million AUD or 34 million AUD of total public investment between both institutions. This followed competition to host the expected 2,000 jobs derived from the project construction stage.The news raised criticism due to the lack of transparency in the process, the councils' decision to invest in infrastructure outside its jurisdictions and the ownership of the new asset, which despite councils' financing may not be public. Following the project delays, the proposed airstrip has been shelved with the budgeted money allocated to other shovel-ready projects.
Jobs and economic benefits
In 2015, Environment Minister Greg Hunt announced federal approval for the project stating it would contribute $930 million to the Mackay region's GDP and $2.97 billion to the Queensland economy each year for the next 60 years. He claimed the 4 billion tonnes of coal resource extracted over its lifetime would be worth $300 billion. In court, Adani said the lifetime output of the mine would be 2.3 billion tonnes of coal.Estimates for the number of jobs to be created at the mine have steadily diminished from a high of 10,000 to a low of 1000:
In December 2014, the CEO of Adani Mining was quoted as saying the mine would create 10,000 jobs. The company took out a television advertisement during the 2015 Queensland election including this claim. Former Prime Minister Tony Abbott cited the 10,000 jobs figure as evidence "this mine is good for the country". In Queensland's Land Court, Adani's expert witness, economist Jerome Fahrer from ACIL Allen consulting, rejected the 10,000 figure, saying the project would create less than 1,500 jobs. Fahrer described the method used to produce the 10,000 figure as 'deficient'. In May 2015 a complaint was lodged with the Australian Securities Exchange alleging Adani was providing misleading information about the project. In 2016, the CEO of Mine Operations, JJ Jakanaraj stated "We will be utilizing at least 45, 400-tonne driverless trucks. All the vehicles will be capable of automation. When we ramp up the mine, everything will be autonomous from mine to port. In our eyes, this is the mine of the future"
A June 2019 estimate stated the number of ongoing, operational jobs at the mine would be "between 800 and 1,500."
Financing
In 2015, the Government-owned State Bank of India signed a Memorandum of understanding with Adani that it will offer a $1 billion loan to the project, yet was widely reported that the Bank had withdrawn this offer. This was rejected by the bank's Chairman.In 2015, a number of major international banks publicly ruled out financing the Carmichael Mine and Rail Project, or the Abbot Point Coal Terminal on which the Carmichael project depends. This includes more than half of the top 20 coal financing banks globally. Banks ruling out funding include: Citigroup; JP Morgan Chase; Goldman Sachs; Deutsche Bank; Royal Bank of Scotland; HSBC; Barclays; BNP Paribas; Credit Agricole; Societe Generale; National Australia Bank. Adani spokespeople said statements from banks they have not approached have "no bearing" on the project. Standard Chartered provided financing to the project, but Adani ended the bank's advisory contract.
Large coal projects in Australia typically engage with one or more of the ‘big four’ Australian banks in arranging or providing debt. In August 2015, Commonwealth Bank announced that its advisory contract with Adani had ended, nonetheless have not ruled out funding Adani and are viewed as the most likely local backer. In September 2015, National Australia Bank announced it would not fund the project. In April 2017, Westpac announced it would not fund the project. In August 2017 the remaining bank Australia and New Zealand Banking Group distanced itself from Adani and announced a strategic shift away from coal.
In 2015 environment groups have pursued campaigns to pressure banks to rule out funding the project. Some have encouraged customers to switch bank accounts and mortgages away from the large banks funding coal projects.
Financial viability
Analysts have doubt the mine is viable given seaborne thermal coal prices and market trends.In November 2013 Morgan Stanley valued the mine at $0 and said "the company does not plan to spend money on developing the mine until coal prices rise from current levels". In November 2014 Daniel Morgan, global commodities analyst at investment bank UBS, said that a price of about $100-$110 a tonne was required to cover costs and return on capital. Seaborne thermal coal prices have dropped from highs of around US$140/t in 2012 to around US$60/t in 2015 due to increases in production and reduction in seaborne coal demand.
In September 2015, UBS said in a briefing note "no new coal mines needed on 5+ year view" and projected prices recovering to $88/t by 2019—still below the required price for Carmichael.
The director of energy finance studies Australasia at the Institute of Energy Economics and Financial Analysis, argued in 2015 that the Carmichael mine is a 'stranded asset' due to structural decline in seaborne coal markets; Adani's already high debt gearing; difficulty raising capital, a recent company restructure and approval delays. In 2015, documents from Queensland Treasury released under Freedom of Information showed senior officials advising Ministers that Carmichael "is unlikely to stack up on a conventional project finance assessment".
In 2015, LG announced it will not proceed with a contract to buy coal from the mine. Most of the coal from the mine would be purchased by Adani in India. However, by June 2019, the costs of solar power generation in India had decreased to the point that government subsidies might be required to make coal powered generation in India economically feasible. It was not yet clear whether Adani Group chairman Gautam Adani would choose to provide the $2 billion required for the project from his own pocket, or whether government subsidies would be necessary.
Proposed government subsidies
put "well over half a billion dollars into lobby groups that push coal and fossil fuels".From 2015 onward, the Queensland and Australian Governments have proposed various forms of assistance to the project despite the G20 commitment to phase out "inefficient" fossil fuel subsidies.
Queensland state subsidy
, the Adani Group is set to receive a seven-year royalty deferral worth $900m, and over $4.4 billion in total tax exemptions, deferrals and capital subsidies from Queensland taxpayers for the life of the Carmichael mine. Queensland Government budget papers show spending of $9.5 billion between 2008 and 2014 assisting the mining industry. Queensland Treasury wrote in a submission to the Commonwealth Grants Commission: Governments face budget constraints and spending on mining-related infrastructure means less infrastructure spending in other areas, including social infrastructure such as hospitals and schools. The Newman Queensland Government initially claimed it would not support the Carmichael project, but in 2014 it proposed a "royalty holiday" or reduced royalty rates, as well as proposing to "co-invest" in infrastructure. The Labor Opposition criticised this as a "blank cheque".Treasurer Jeff Seeney argued "The Queensland government, like governments across the world, have always provided some major incentives and the incentive we have decided to provide relates to infrastructure rather than the traditional handing out of grants."During the 2015 Queensland election, the Labor Opposition promised not to fund the rail project linking the mine to the port. After Labor's election victory, the new Queensland Treasurer confirmed the government will not fund the rail line, but did not rule out other forms of support such as a royalty holiday. in September 2015 Premier Palaszczuk said she was "absolutely committed" to the project going ahead and called for federal funding for the rail line.
Federal subsidy
The 2015-16 Federal Budget outlined the $5 billion Northern Australia Infrastructure Facility "to provide large concessional loans for the construction of ports, pipelines, electricity and water infrastructure that will open our northern frontier for business." The website states "The Commonwealth will not lend to projects that are commercially viable without Government assistance." In August 2015 the ousted Abbott government was considering using this fund to ensure the Carmichael rail line is built.Environmental impacts
Greenhouse gas emissions
According to the mine's environmental impact statement it will produce 200 million tonnes of carbon dioxide over the expected 60-year life of the mine. This includes gases produced during the mining process and from emissions created from the mining and transportation of the coal. Deciding on the approval for the mine, The President of the Land Court of Queensland stated, "there will be no increase of greenhouse gas emissions if the Carmichael mine is approved. This is because alternative supply will be sourced elsewhere to meet global demand if the mine is not approved."The burning of that coal has been estimated to produce another 130 million tonnes of carbon dioxide every year.
In court, Adani claimed it expected the mine to produce 2.3 billion tonnes of coal over 60 years, averaging to just under 40 million tonnes of coal a year, equivalent to 4.7 billion tonnes of carbon dioxide. This is "approximately 0.53-0.56% of the carbon budget that remains after 2015 to have a likely chance of not exceeding 2 degrees warming."
A Greenpeace report showed the output from Carmichael would exceed the yearly carbon dioxide emissions from fuel combustion in many countries.
Vehicle convoy - environmental protest
In April 2019 Bob Brown led a convoy of vehicles to protest against the proposed coal mine. He was criticised by the coal mining industry for this action.Impact of 2019-2020 bushfires
In the wake of disastrous 2019–20 Australian bushfire season, Australia's climate policies, including the Carmichael mine, have become an ongoing topic of public discussion in Australia.Local impacts
Water
Adani has applied for a water licence to extract up to 12.5 GL per year from the Belyando River for use at the Carmichael mine. The mine will also use groundwater that flows to the surface during the process of "dewatering" the open cut pits and underground mines.According to the Supplementary Environmental Impact Statement submitted by Adani, "maximum impacts in excess of 300m are predicted" for the local water table. Beyond the mine boundary, Adani's groundwater model predicts water table levels to drop "typically between 20 and 50m" and "up to around 4m in the vicinity of the river". Impacts on ground water were central to a case in the QLD Land Court, where Adani's expert witness defended inferences drawn from drilling data, against allegations that this was insufficient to determine risks of collapses underground that could impact groundwater systems.
Endangered species
The mine site area is home to a number of species, including the yakka skink, ornamental snake, and the waxy cabbage palm. Moray Downs, which is covered by the mine site, is home to the largest known community of black throated finches The finches' population is in decline, and the southern subspecies is threatened, having vanished from 80% of its former range. Adani Australia produced a management plan for the finch, proposing to gradually clear land around the mine and force the finches to move away. The plan was heavily criticised by ecologists, who highlighted the plan to graze cattle on protected land and noted the land was tagged to be used for other projects. There was also a lack of transparency and consultation with experts in the field.Bygana West Nature Refuge: endangered koala habitat
The Carmichael project's open-cut mine most of the Bygana West Nature Refuge, which includes two endangered regional woodland ecosystems and habitat suitable for a variety of animals including koalas.Legal challenges
There have been a number of legal challenges to the project.Native Title claims
''Adani Mining Pty Ltd and Another v Adrian Burragubba, Patrick Malone and Irene White on behalf of the Wangan and Jagalingou People''
Indigenous landholders mounted a challenge to Carmichael Mine, and called on the Queensland Government to refuse a mining lease to Adani Mining. In a major test of Australia's native title laws, the Wangan and Jagalingou people rejected the Indigenous Land Use Agreement with Adani. Adani then launched legal action in the Native Title Tribunal in an attempt to enable the Queensland government to compulsorily acquire the land and push the mine ahead.Adrian Burragubba, spokesperson for the Wangan and Jagalingou people, said
"But I think there is a concern that the values that have been expressed in the Native Title processes, probably since 1997, are that mining is really equivalent to the public interest, mines must go ahead, and it's about compensation. So I think the don't have a lot of confidence that 'no' is really on the table, even though the legislation does provide it is on the table."The traditional owners against the development claimed the project would "devastate their ancestral lands and waters, totemic animals and plants, and cultural heritage".
Environmental law
''Mackay Conservation Group v Commonwealth of Australia and Adani Mining''
In January 2015, the Mackay Conservation Group, based in Mackay, challenged the July 2013 federal approval of the Carmichael project by Greg Hunt, Environment Minister, under the Environment Protection and Biodiversity Conservation Act 1999. The Group was represented by the Environmental Defenders Office of NSW. The case involved three main contentions:- That the Minister unlawfully excluded consideration of greenhouse gas emissions to emissions directly associated with the operation of the mine. The Minister did not consider the much larger emissions associated with burning the coal from the mine.
- That the Minister failed to consider Adani's poor record of environmental management in India, including building without approvals and illegally clearing mangroves, instead relying on a statement from the company that it has a good track record.
- That the Minister did not consider "approved conservation advice" for two endangered species that would be affected by the mine, the Yakka Skink and the ornamental snake, as required by federal law.
The Department is currently reassessing the proposal.
''Adani Mining Pty Ltd v Land Services of Coast and Country Inc.''
In May 2014 the Queensland Coordinator General recommended the project be approved and there was a call for public comment and objections. Coast and Country, represented by Environmental Defenders Office Queensland, brought a case to the Queensland Land Court. They contended:- "Adani grossly overstated to the public the number of jobs, and royalties the mine would have for Queensland;
- The mine, rail and port as well as the burning of coal will cause damage to the Great Barrier Reef from climate change and ocean acidification;
- The mine will destroy the core population of endangered Black Throated Finch and may impact Waxy Cabbage Palms, and the potatoes grown in the area too;
- The mine will threaten the base flow of the Carmichael River and may threaten the ancient springs estimated to be one million years old; and
- The project is extremely risky and unlikely to be financially viable."
''Australian Conservation Foundation Inc v Minister for the Environment - Emissions challenge 2016-17''
The main contention was that the Minister did not consider the impact of greenhouse gas emissions on the Great Barrier Reef.
The case was dismissed because the court found that the cause and effect was complicated, the lower court stating that it was "not possible for him to draw firm conclusions as to the likely contribution of Adani's action to a specific increase in global temperature" and that if the coal was stopped from the Carmichael Mine it would likely be substituted from somewhere else. Dr Justine Bell-James has criticised the market substitution defence as the "only significant barrier remaining to a successful climate change case". The Court ordered ACF to be part of the legal costs for Adani and the Minister. The environmental approval was approved which lasts for 99 years.
''Australian Conservation Foundation Inc v Minister for the Environment - Water challenge 2018''
The Australian Conservation Foundation being represented by Environmental Defenders Office Queensland lodged a judicial review challenge in the Federal Court of the Federal Environment Ministers decision to not apply legislation regarding water. The issue had previously been highlighted by environmental groups such as Lock the Gate Alliance. The review challenges the Environment Minister Melissa Price's decision to waive a full environmental assessment for a pipeline that will extract up to 12.5 billion litres of water a year from the Suttor River in central Queensland. Adani notified the government that the act was a controlled act but the government decided that it was not a controlled activity under the EPBC Act and that no environmental impact assessment was needed for it to proceed. Under the amendments to the EPBC Act the Minister must obtain advice from an Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development if an activity is likely to have a significant impact on water resources or impact on a protected ecological communities, species (such as the black-throated finch, world heritage sites, national heritage sites or protected wetlands. The water trigger was added to the EPBC act in 2013 the amendment was introduced by the then Federal New England MP Tony Windsor.Criticism of legal action
Substantial controversy about federal environmental law followed the 2015 Federal Court decision to set aside the Carmichael approval. Government Ministers criticised the group bringing this case under federal environment law, calling them "vigilante litigants" engaged in economic "sabotage".As of 2015 the government was seeking to change the law to prevent 'third parties’ from bringing cases where they are not directly impacted by the proposal. Then Prime Minister Tony Abbott urged the business community to get behind these changes, saying "if the Adani mine does not go ahead soon, we are crazy." Radio broadcaster Alan Jones, on many issues a supporter of the Liberal Government, launched a TV ad, stating: "I may live nowhere near the Liverpool Plains or the Great Barrier Reef. But I sure as hell am concerned they are protected.... The latest move by the Abbott government puts at risk not just our environment but our very democracy"