Adani refuses to commit to size of 'scaleddown' Carmichael coalmine
Adani has refused to commit to the size of its “scaled-down” Carmichael coal project and is still pursuing final approvals based on plans for a 60m-tonne megamine in central Queensland.
The Queensland government has confirmed that while Adani announced last year it intended to build a much smaller mine, the Indian company has filed no formal plans on that basis.
Instead, the state is assessing Adani’s key environmental management plans on the assumption the project would produce up to 60m tonnes of coal a year.
When the company’s groundwater plan was assessed by the federal government, the CSIRO and Geoscience Australia provided expert advice that recommended Adani commit to a particular mine plan, or to producing a set amount of coal.
In response Adani said it would “not [commit] to a scaled-down mine plan” and instead provided a map with little
detail, showing a different mine footprint to approved plans.
When asked by Guardian Australia whether Adani would rule out eventually expanding the mine to 60m tonnes a year (MTPA), in line with its approvals, the company did not answer the question.
Instead it said the board of its parent company “has approved finance for the development of a 10 MTPA mine, which will be developed within the existing project approvals”.
“We originally sought and have been granted approval for a 60 MTPA mine,” it said “We do not intend to revisit the existing approvals given the (smaller) mine development and operation will be undertaken in accordance with the existing approvals.”
Adani did not address questions about why it would not commit to the scaled-down plan.The company announced it would build a smaller version of the Carmichael project in November – and that it would be self-financed – after it was unable to secure external investment for the initial $16bn proposal.
Tim Buckley, the director of energy finance studies for the Institute for Energy Economics and Financial Analysis, said potential financiers had balked mainly because of concerns about environmental activism, outstanding approvals and the risk attached to a greenfield development. Buckley said those concerns would be allayed once the mine was operational, and the “bankability” of the project for potential investors would increase. “I have absolutely zero doubt that once they get the initial 10m tonnes up and running, the discussion will become about how quickly can [Adani] ramp up,” he said. “It’s so much easier to expand brownfield and it’s so much lower risk than it is to expand greenfield.
“Adani mining has no revenue in Australia, so there’s nothing for a bank to lend to. Once you’ve got 10 [million tonnes a year of coal being produced], against that you can borrow.”
Environmentalists said Adani’s refusal to commit to a scaled-down plan, when advised to do so by federal agencies, cast doubt on the company’s claims the mine would no longer be the “megamine” that attracted controversy.
“If Adani receives final approvals for its Carmichael mine, there will be no regulations stopping it from pursuing a 60 MTPA thermal coal-producing mine as originally planned,” Carmel Flint from Lock the Gate said.
“Adani’s claims it is now pursuing a scaled-down version of its Carmichael mine should be taken with a grain of salt. If it makes economic sense, the company will undoubtedly expand to the gargantuan mine it originally planned. If this occurs, the sheer amount of thermal coal produced from the mine will contribute a catastrophic amount of greenhouse gas into the atmosphere.”
The Queensland Department of Environment and Science, which is the assessment authority for management plans that require approval before construction can commence, told Guardian Australia all assessments were proceeding on the basis the mine would produce up to 60m tonnes a year.
“The Carmichael coalmine approval was assessed based on a maximum footprint and scale of up to 60 MTPA product coal as described in the environmental impact statement,” the department said. “While no additional approvals may be required for a smaller mine, certain matters, such as financial surety, may vary.
“While Adani [has] made announcements about scaling-back the project, the scope of the environmental authority is based on the maximum project described in the EIS. The [outstanding management plans] are also required to consider the maximum potential impacts of the 60 MTPA project, including appropriate management and mitigation measures such as biodiversity offsets.
Adani says it has briefed the department and provided relevant documentation “to update them on the mine’s reduction in size”. “We have undertaken the required engineering and modelling necessary to deliver the mine safely and in line with our approval conditions,” the company said. “We will continue to comply with our existing project conditions and reporting commitments.”