Australia hints at help to Adani mine
Australia’s government has indicated strong backing for a loan of almost 1 billion Australian dollars for Indian conglomerate Adani Group to build the world’s largest coal mine, despite projections of a global glut of the commodity and environmental concerns.
Deputy Prime Minister Barnaby Joyce said a A$900 million (US$675 million) concessional loan from a development fund is “a great idea" that would stoke jobs and growth. Mr. Joyce—who leads the Nationals party, the junior partner in the ruling conservative coalition government—said that outweighs concerns about the proximity of the mine to the Great Barrier Reef.
“We want to get this show up and running. It’s a A$16 billion investment that is going to be great for people who have just been through a major cyclone to make sure we have jobs for them," Mr. Joyce said on state radio Tuesday. The mine would be in Queensland state, where Tropical Cyclone Debbie lashed tourist islands and resorts last month.
Hours before Mr. Joyce spoke, Prime Minister Malcolm Turnbull met with Adani Chairman Gautam Adani in New Delhi to discuss the Carmichael coal mine, which would be built just inland from the Great Barrier Reef and ship coal to India past its coral banks.
Despite projections of a global glut of the commodity and a prolonged downturn in prices, Adani has been pushing ahead with plans to build the mine that would produce thermal coal to generate electricity and operate for six decades. The company plans to produce as much as 60 million metric tons of thermal coal a year from six open-cut pits and five underground mines.
But Carmichael has faced fierce opposition from activists, who have lodged challenges on environmental grounds and campaigned lenders world-wide, including on Wall Street and in Europe and Australia, to rule out financing the development.
The government of tropical Queensland, which supports the mine, launched an investigation on Monday into an apparent spill of coal-tainted water from Adani’s Abbot Point port into the adjacent Caley Valley wetlands area, adding to concerns about runoff threatening the marine park surrounding the Great Barrier Reef.
Adani said that it complied with environmental regulations covering the release of water after the cyclone and that aerial photographs showing the wetlands as black from coal contamination were misleading.
Mr. Turnbull, in his meeting with Mr. Adani, assured top executives that the conservative government is preparing to fix issues surrounding claims to the land by indigenous people, clouding a final investment decision by the company. Legislation is set to go before Australia’s minority Senate within months.
The pair also discussed a possible loan from the A$5 billion Northern Australia Infrastructure Fund to help build a rail line to the mine. The fund is independently administered but overseen by Resources Minister Matt Canavan, who is from Queensland and a member of Mr. Joyce’s party who strongly backs building the mine.
As with the U.S., where President Donald Trump has promised to rejuvenate the coal industry, Australia’s government strongly supports coal mining. Mr. Joyce said the mine would open a new precinct for extraction from the Galilee Basin of Australia’s second-biggest export. The move would create 3,000 jobs in an area hit hard by the end three years ago of Australia’s mining boom and provide India with cleaner-burning thermal coal.
“It’s a great investment in getting people out of poverty, providing electricity," he said.
Source: The Wall Street Journal