Adani Australia’s chief executive Jeyakumar Janakaraj – known in the industry as “JJ” – has done an opinion piece in the Australian Financial Review saying that their team at Adani has not wavered in their vision to build the Carmichael mine, rail and port project in Central Queensland. They’ve been working on it for seven years, have spent $3.3 billion to date, have 800 people working right now and have put up arguments to answer their critics.
Hear him out and see what you think.
On demand for coal he says:
- The International Energy Agency predicts global energy demand will grow by 30 per cent in the next 22 years. To help meet this demand, power generation will increase 370 per cent. Power from coal generation will increase 250 per cent and power via renewables will increase 1750 per cent.
He says there are 55 super-critical and ultra-critical coal-fired power stations planned and under construction in India. He says that coal from India can’t meet the demand and Indonesia will be reducing exports in favour of using more at home.
He says that stage one of Carmichael will produce 27 million tonnes per year which represents about 10 per cent of Australian thermal coal production, and a tiny fraction of the coal used globally.
He says Adani has met every challenge to gain 112 approvals. He says Australia is at a crossroads:
- Australia’s prosperity has been built on investment in industries that create jobs, export earnings and government revenue such as agriculture, coal, natural gas and iron ore. That investment has been made possible by a framework of legislation, regulation and a robust legal system all backed by a reliance on fact and science that gives the public confidence and ensures checks and balances are in place to protect the environment.
- I hope Australia chooses to continue on this path rather than on a new path wherein the loudest voices dictate public policy without regard to fact, consistency and robust governance processes.
On 27 February in the AFR Mark Ludlow reported on Adani’s response to some of the specific criticisms made.
The main one relates to the quality of the coal. Adani says that an independent report shows that Carmichael coal has an ash content of 22 per cent, about half that of domestic Indian coal. It is also cleaner than Indonesian coal. Two tonnes of Carmichael coal will produce as much energy as three tonnes of Indonesian coal. So while it is dirtier than Hunter Valley coal it is clean enough to be competitive with coal elsewhere.
The JJ article mentioned Adani “opening other markets”. Ludlow reports that of the 27 million tonnes pa, 17 million would likely go to India, 5 million to China and 5 million to Vietnam. In addition the coal would be competitive enough to sell on the spot market in South Korea and Taiwan from time to time.
Demand across Asia is expected to increase from 150 million tonnes in 2017 to 290 million tonnes by 2035.
In an article in the same paper, Jenny Wiggins reports that Adani needs $6.7 billion for the first stage, and is currently $3.3 billion short. That’s not an impossible sum and roughly about a fifth of the Adani family’s net worth. Equity partners may be sought.
Wiggins says the firm AECOM with design HQ in Madrid and offices in Brisbane and Townsville are still working on the design of the railway.
If Aurizon don’t come to the party, Adani may go alone on the railway and end up making money out of transporting coal from the other eight mines possible in the Galilee Basin.
We should remember that Gina Rinehart and Clive Palmer also own coal tenements in the Galilee Basin. They may get involved, or pick up the pieces if Adani pulls out.
Meanwhile as people argue about whether Adani go ahead, there is plenty going on elsewhere. For example, this article in January – Queensland coal mining: Billion-dollar projects in pipeline for Surat and Galilee basins
- A RACE valued at billions of dollars for Queensland has started among a handful of mining companies with the potential to dwarf Adani’s megamine.
GVK Hancock, in which Gina Rinehart has a minority stake, has revealed renewed interest in its Galilee Basin projects, while New Hope and Glencore have their sights on 2020 to 2022 for projects costing billions.
GVK cited a report from the International Energy Agency predicting stronger coal demand in 2022 and that Asian countries, including India, were expected to more than offset lower demand in other markets in Europe, America and China.
GVK has two Queensland projects, the $10 billion Alpha mine and rail line and the $6 billion Kevin’s Corner mine, and the renewed interest follows a major spike in coal demand, which has pushed thermal coal spot prices above $US100 a tonne.
The two mines at full production will produce around 60 million tonnes, more than double Adani’s first stage of 27.5 million tonnes.
“The shareholders of GVK Hancock remain fully committed to these projects…
Not a peep from Adani protesters.
The plain fact is that as these coal mines go ahead, the prospects for sustainable human civilisation continuing without major disruption on this planet diminishes. Our politicians should be saying that new coal-fired power stations must not be built anywhere on the planet, and if they do they will become stranded assets, sending their investors broke.
Burning coal is currently seen as the responsibility of those who burn it. Our politicians should change this, saying that ethically we are no longer prepared to supply the means of destroying life on the planet.
The Adani protests are a sideshow, to achieve short-term symbolic and political ends. Stopping Adani won’t necessarily stop Carmichael or Galilee, won’t save the Great Barrier Reef and will make the development of new coal elsewhere in Australia easier.
See also the earlier post The Adani Project: – is it good for Australia?, plus Adani casts a long shadow over Batman and Do we seriously want to save the Great Barrier Reef?