Giant Galilee coal mine gets Canberra nod

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Mon 28 July 2014


Environment Editor, The Sydney Morning Herald

The federal government has approved a giant Queensland coalmine that it says will generate as much as $300 billion for the economy, but which environmental groups say will contribute to a “carbon bomb” and risk causing significant damage to the Great Barrier Reef.

Environment Minister Greg Hunt on Monday said that he had approved the Carmichael Coal Mine in the Galilee Basin and its associated rail link to the coast with “the absolute strictest” environmental conditions.

The 36 conditions, which include offsets of about 30,000 hectares for habitat destroyed, water returns for the Great Artesian Basin and $1 million for further research in protecting threatened species, will ensure the mine owner, India’s Adani, “meets the highest environmental standards”, Mr Hunt said in a media statement.

At full capacity, the Carmichael mine would produce as much as 60 million tonnes of coal a year, with a “resource value of $5 billion per annum over 60 years”, the statement said.

Apart from the boost to the local economy to the tune of 3920 jobs for operations and 2475 during construction, the mine will also “provide electricity for up to 100 million people in India”, Mr Hunt said.

Environmental groups including Greenpeace, though, warn the mine’s output would generate almost 130 million tonnes of carbon dioxide when burnt each year, or equal to about a quarter of Australia’s current annual emissions.

Billionaire MP Clive Palmer also owns two Galilee coal reserves that may produce as much as 80 million tonnes of coal a year if those mines get developed.

“History will look back on the Abbott Government’s decision today as an act of climate criminality,” said Greens Senator Larissa Waters, the party’s environment spokeswoman.

“The proponent, Indian-owned Adani, is in financial dire straits and has already faced complaints about breaches of environmental laws in its home country.

“There’s no guarantee Adani will be able to pay for the environmental conditions attached to the approval and with the Abbott and Newman governments slashing environment department staff, there’s no capacity to enforce them."

'Coffin' for the Reef

The mine, if it proceeds, would also increase the number of ships entering the Great Barrier Reef by about 450 a year, according to Felicity Wishart, a spokeswoman for the Australian Marine Conservation Society.

“This is yet another nail in the coffin for the Great Barrier Reef,” said Ms Wishart, adding that Carmichael and other proposed coal mines and gas plants in the region would likely increase the number of ships entering the reef area from about 4000 a year to 7000 by 2020.

Paul Oosting, campaigns director at social organising group GetUp!, said the approval was an “outrageous decision”.

“GetUp! will fight tooth and nail to make sure it will never occur,” Mr Oosting said, noting campaigns had succeeded in discouraging the involvement of banks such as Deutsche Bank, Barclays and RBS in the Abbot Point coal export terminal that will link to Carmichael.

The government should also have taken greater account of Adani’s “proven and documented track record of bribery, corruption and environmental degradation” in India, Mr Oosting said.

Water watch

One of the government’s conditions is that the mine will return a minimum of 730 megalitres of water to the Great Artesian Basin every year for five years.

However, Lock the Gate’s Central Queensland spokeswoman, Ellie Smith, said the mine would do “great damage to ground and surface water systems and the communities that depend on them”.

“Environment Minister Greg Hunt has ignored his own panel of top water scientists and is putting the Great Artesian Basin at further risk by allowing mine dewatering to drain the Basin,” Ms Smith said.

Adani has said the Carmichael mine would extract as much as 12.5 billion litres of water every year, which its own assessment predicts will mean a lowering of the water table beyond the boundary of the mine by as much as 20-50 metres, Lock the Gate noted.

Market hurdle

Getting government approval may be easier than winning over markets that have soured on coal, with prices of the commodity dropping about 50 per cent over the past five years.

Concerns about over-supply as nations such as Russia, Indonesia and Mongolia join Australia in preparing to ramp-up production have lately been complemented by signs that global action on climate change will see carbon costs imposed on coal to curb its usage.

South Korea, for instance, this month slapped a coal tax of about $18 per tonne of coal and will introduce a broad carbon price from 2015. Neighbouring China, easily the world’s largest producer and consumer of coal, has also unveiled plans for a national carbon emissions market and may aim to curb coal consumption within coming years.

Tim Buckley, a former Citibank analyst and now a director at the Institute for Energy Economics and Financial Analysis, said the environmental approval itself was no surprise.

“I never expected [Mr] Hunt to go against Premier [Campbell] Newman nor Prime Minister [Tony] Abbott's desire to promote foreign firms trying to sustain Australia's coal industry,” Mr Buckley said.

“Ironically, should the Galilee proceed, it will actually accelerate the longer-term destruction of our coal export industry by dramatically expanding the capital invested, whilst at the same time taking coal prices globally down another 10-20 per cent.”

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