Australian news, and some related international items

Adani’s Coal Mine Is A Dud

Dear reader, I’m asking you to imagine the unimaginable.

Imagine that Adani’s proposed Carmichael coal mine in the Galilee Basin is economically viable.

Imagine that there is an assured market for coal over the life of the mine – the next 40 to 60 years. Thermal coal prices will recover and stay high. That’s because developments in solar, wind and other renewable technologies will grind to a halt. There will be no further improvements in battery technologies. In spite of worsening damage from extreme weather events and the collapse of some of the world’s agricultural regions, governments will follow Trump’s lead and abandon efforts to address global climate change.

OK, it’s hard to put yourself into the mindset of Barnaby Joyce, Mathias Cormann or Matthew Canavan, and it’s even harder to suspend disbelief as some of the more intelligent members of the Coalition Government have done, but have a go for five minutes.

The trouble is that the Carmichael mine would still bring no worthwhile economic benefits to Australia, and would certainly not justify a $900 million concessional loan from Joyce’s National Party Slush Fund (aka “The Northern Australia Infrastructure Facility”).

There would be some new jobs, but not many……..

Unless the executives of Adani have been on the same recreational substances as Joyce, Cormann, Canavan and Trump, they would surely know that thermal coal has no future……..

Even if Adani could forestall import bans and crowd out renewable developments, however, on a world scale that would not support coal prices, as other countries turn away from coal, leaving plenty of spare capacity. In a world of low demand and therefore low prices for coal, it would be easy for Adani to “renegotiate” royalty payments to the Queensland government. That is, to threaten to close the show down unless the government reduces or abolishes its royalties, leaving nothing for Australia except for a huge hole in the ground, damaged aquifers, an insult to the land’s traditional custodians, the carcass of abandoned mine equipment, a railroad to nowhere, and a ruined national reputation as a responsible global citizen.

Economists taking a long-term view of this project see it as a dud. But when we’re dealing with two governments, one federal the other state, clinging on to office without parliamentary majorities and desperate to pull off a big project, economic responsibility is easily sacrificed.


April 22, 2017 - Posted by | General News

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