Now, I know that a lot of the discussion on this has been a bit of a distraction. We’ve heard about enviromentalists using the courts to hold up the mine. (Not Margaret… we’re boycotting her!) We’ve heard the wonderful oxymoron “vigilante litigation”. We’ve heard that the indigenous people concerned are completely behind the mine… apart from a few troublemakers. We’ve heard about how we’ll be lifting people in India out of poverty. We’ve heard that Getup! has no right to protest. We’ve heard that the coal miners in the Hunter Valley are concerned that it would lead to a drop in their prices. We’ve heard that our coal is pure and we’re actually helping to reduce carbon emissions with Adani’s mine. We’ve heard about the loan for the railway. We’ve heard about conflicts of interest. And, most recently, we’re hearing that the Queensland Government is ruining everything by its refusal to give Adani a royalty holiday.
But let me, once again, make the obvious point:
Adani will not go ahead because it’s just not commercially viable.
The banks know this. That’s why they won’t finance it. The Coalition can get all hot under the collar and complain that they’re giving in to pressure, but banks have a history of not wanting to throw their money away! (Yes, I know some pedantic person will point out that they haven’t always been successful at this, but, as a general rule, they won’t lend you money if they don’t think that your business will be around long enough to pay them back with interest!)
And, of course, in making this prediction, I am ignoring the likelihood that the Federal government may simply offer them such generous finance that they take it, dig a few holes and then announce that they’ll need more support or else they won’t be able to continue.
If you think about it for just a second, and forget all the other white noise, it becomes obvious. If the project is such a great money spinner, then they wouldn’t need a billion dollar loan or a royalty holiday. It’s not like Adani is some small business with no capital of its own. And, if the project has such great potential, even if they didn’t have quite enough, they could simply borrow the rest…
Oh that’s right! No bank will lend it to them.
Perhaps they could try Cash Converters.
Or you and me. The taxpayers of Australia. We should be able to finance a foreign company to dig up our resources and, in return, they’ll pay royalties as soon as they’ve made a truckload of money.
Yeah, sounds legit!