Antinuclear

The Australian tax-payer is the sole investor in Adani’s coal export plans.

Aside from the culture, environment and cost, is Adani a good investment?, The Age, Julien Vincent , 13 Dec 16, 

The Australian public is the sole investor in Adani’s coal export plans.

Adani is an Indian conglomerate that wants to build the largest thermal coal mine in Australia, a rail line of almost 400 kilometres connecting it to the coast, and a coal export terminal in the Great Barrier Reef World Heritage Area. The coal would be shipped out through the reef, giving it a perfect view of the bleaching and mortality that has been decimating our valuable natural icon recently before being burned in power stations overseas, only to further contribute to climate change and ocean acidification, considered the greatest long-term risks to the reef.

Given that the reef sustains 60,000 jobs and provides $6 billion per year of economic benefit to Australia, investors may want to consider conflicts of interest before moving ahead.

Some other niggling environmental risks investors might want to consider is the drainage of 12 billion litres per year of water from the Great Artesian Basin and the impacts of coal dust on people’s health along the transport corridor, along with particulate matter from the power stations as the coal is burned.

We’d also want to be content with supporting a mine that has not received free, prior and informed consent from traditional owners, potentially making this a major human rights issue.

But enough of the existential threats posed to culture, people, sites of natural World Heritage and the climate.

Let’s look at the numbers. Last week’s proposal by the Australian government of a $1 billion loan from the Northern Australia Infrastructure Fund means as investors we need to understand the business case.

First of all, don’t be put off by Adani’s corporate debt, which is two-and-a-half times the size of the company. Or the fact that Adani’s share price is down 20 per cent this year. This loan would actually be going to Adani’s private family company, based in Singapore and ultimately owned by Atulya Resources in the Cayman Islands, where we can be sure the money will be totally secure.

The mine will supply new coal power stations in India, whose power minister said yesterday would not be required until 2022, and who wants to get India off imported coal within the next few years. The power will only cost twice that of new renewable energy, and so an exciting market has been identified among those living in energy poverty.

Should the India option fail, the coal could be sold onto the seaborne market, which has declined by 10 per cent in recent years, Goldman Sachs, Deutsche Bank, Bernstein and others declaring it in structural decline.

Conditions like these have frightened off a few more faint-hearted commentators, such as the Queensland Treasury under the Newman government, which described the project as unbankable. Or Wood Mackenzie, which still considers the project as having a negative net present value.

Should the India option fail, the coal could be sold onto the seaborne market, which has declined by 10 per cent in recent years, Goldman Sachs, Deutsche Bank, Bernstein and others declaring it in structural decline.

Conditions like these have frightened off a few more faint-hearted commentators, such as the Queensland Treasury under the Newman government, which described the project as unbankable. Or Wood Mackenzie, which still considers the project as having a negative net present value…….

It’s clear that our investment is going to make a major difference. But will it be enough? $1 billion is a huge lifeline but depending on what assumptions you make about the scale of the project or who you’re prepared to believe, this project is going to cost anywhere from $7 billion to $21 billion……http://www.theage.com.au/business/mining-and-resources/aside-from-the-culture-environment-and-cost-is-adani-a-good-investment-20161213-gta0nq.html

December 14, 2016 - Posted by Christina Macpherson | AUSTRALIA - NATIONAL, business, climate change - global warming, Queensland