In Oz, Adani coal project sparks climate worries

In a desolate corner of northeastern Australia, about 100 miles from the nearest town, a grassy stretch of prime grazing land sits above a vein of coal so rich and deep that it could be mined for decades.

The Australian government is considering a proposal to build one of the world’s largest coal mines in this remote locale, known as the Galilee Basin, where acacia and eucalyptus trees grow wild between scattered creeks.

An Indian conglomerate, the Adani Group, has asked for a taxpayer-financed loan of as much as $800 million to make the enormous project viable, promising to create thousands of jobs in return.

But the plan has met intense opposition in Australia and abroad, focusing attention on a question with global resonance: given the threat of climate change and the slowing global demand for coal, does the world really need another giant mine, especially at the public’s expense?

Adani has proposed building six open-cut pits and five underground complexes capable of producing as much as 66 million tonnes of coal a year. New infrastructure to support the mine — a rail line to the coast and an expanded port — would also make it economically feasible to extract coal from at least eight additional sites in the Galilee Basin.

That could more than double coal output in Australia, which already produces more coal than any other nation except China, the United States and India. About 88% of the 487 tonnes of coal mined in Australia is exported.

For many environmentalists, what happens in this mining case is a test of the world’s commitment to fighting climate change. Its failure would register as an unmistakable sign of an international shift away from the fossil fuels behind climate change. But if Australia agrees to subsidise the mine — even though several commercial banks have shunned it — the project would demonstrate the lasting allure and influence of the coal industry.

“How it can be constructed — at a time when the whole world is committed to move away from fossil fuels — is madness that most people just can’t understand,” said Geoffrey Cousins, president of the Australian Conservation Foundation.

The project, known as the Carmichael mine, has provoked strong resistance in part because of its proximity to the Great Barrier Reef, a natural wonder that is already dying because of overheated seawater blamed on climate change. Adani plans to deliver most of the coal to India on shipping routes that critics say would further damage the ecosystem of the world’s greatest system of reefs.

The debate over the mine has dominated headlines in Australia for months and fuelled one of the most fervent environmental campaigns in the nation’s history. Protests have grown in size and frequency, and polls show Australians who oppose the mine outnumber those who support it by more than 2-to-1.

A group of indigenous Australians is also challenging Adani’s claim to the land. But Prime Minister Malcolm Turnbull supports the project, and it just needs financing to proceed. A government agency established to support private-sector infrastructure investment is reviewing Adani’s loan request, and the company has said it is also lining up money overseas.

Around the Galilee Basin, where a population of less than 20,000 is scattered across an area the size of Britain, opinion is divided.

Bruce Currie, a cattle farmer who lives near the site and has travelled to India to investigate Adani’s record, said he is worried the mine will drain too much groundwater, calling it “yet another burden our small business has to bear.”

Mining accounts for as much as 7% of the Australian economy, and the northeastern state of Queensland, where the Galilee Basin lies, has suffered a downturn in recent years because of slowing demand for natural resources, especially from China. “I need jobs for Queenslanders,” said the state’s premier, Annastacia Palaszczuk, of the Adani proposal.

Adani has said the project will create as many as 10,000 jobs in the region. But a consultant hired by Adani said the employment claim was overstated in court testimony given in a case where a conservation group was looking to block the mine. Critics have also noted that other mines in Australia may need to scale back production if Carmichael opens, meaning job losses elsewhere.

If Adani and other mines in the Galilee Basin go ahead and reach maximum production, coal from the region would release as much as 700 million tonnes of carbon dioxide into the atmosphere every year, or nearly as much as Germany generates in emissions, according to a study by Greenpeace.

Reviewing the need

Australia has pledged to reduce its greenhouse gas emissions to 26% to 28% below 2005 levels by 2030, but the coal it sells to India and other countries would not be counted in its total. It is unclear if India even needs the extra coal.

After years of big increases in coal consumption, the growth rate slowed in 2016 as the nation has improved energy efficiency and shifted to solar, wind and hydropower. India’s coal-fired power plants are running at less than 60% of capacity, a record low, experts say.

That has raised questions about the economics of the Carmichael mine. Australia’s four largest banks have publicly ruled out financing it, and analysts have argued that the mine would face stiff competition from local sources of coal in India and elsewhere.

Globally, coal consumption actually decreased by 1.7% in 2016, according to a BP report on energy trends, leading the company to declare that “the fortunes of coal appear to have taken a decisive break from the past.”

Critics worry Adani could default on the government’s loan or flood the market, lowering prices worldwide and allowing coal to make a comeback as an energy source.

The Adani Group’s business record has also drawn scrutiny. The conglomerate, whose interests span natural resources, logistics, energy and agriculture, has faced allegations in India of environmental degradation, money laundering and bribery, but it has denied any illegal activity.

Adani leased about 460 square miles of land in the Galilee Basin nearly a decade ago. It can take two to three days to get to the site from the coast, with the last leg of the trip on unpaved roads. Surveying, soil testing and design work has begun, including on an airstrip, mining camp, access roads and the rail link, said Ron Watson, a spokesman for Adani Australia.

Coal from the mine would be transported by rail about 240 miles through grazing land to Abbot Point, the nation’s most northern deep water coal port, which is already used to ship coal to China, Japan and South Korea. Adani has signed a 99-year lease of the port and plans an expansion that would allow it to double the amount of coal going through.

From the air, the piles of coal and equipment at Abbot Point are a striking contrast with the turquoise waters of the Coral Sea. The closest coral of the Great Barrier Reef is just 12 miles away.

Further up the coast is Townsville, home to Adani’s headquarters in Australia, where protesters sometimes congregate and residents exemplify the conflicts felt by many in the region. “You don’t know what’s good for us,” one man snapped at an environmental activist conducting a survey recently. Not too long after, another resident told the activist, “I oppose the mine even though I applied for a job.”