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Scared politicians stampede to embrace coal

If anything highlights the self-serving nature of politics, it is the unseemly stampede by scared politicians to throw out the science, ignore the independent authorities, bypass the judicial process, forget our international obligations, and disregard the future in their haste to embrace all things coal.

Peter Hannam’s explainer in the SMH gives a good rundown of the current state of play for Adani’s mine.  Personally, I can’t see them going ahead without some government money which Matt Canavan has been itching to give them from his secretive NAIF fund.

But there are other things which should give the government some pause.  They are setting themselves, and us, up for failure again.

According to The Australian Industry and Skills Committee,

“Since the mining boom peaked, there has been a shift in focus towards productivity and efficiency gains in the Coal Mining sector. The focus on productivity, has led to an increased uptake of technology and automation within the sector, reducing demand for low-skilled labour. The move towards remote operations centres in the sector has increased the need for skills in interpreting data from machines.

Future demand for thermal coal is expected to decrease as China and the Asia region looks to develop renewable energies, this in turn will likely reduce demand for thermal coal miners.”

On Wednesday, BHP’s CEO Peter Beaven delivered a strategy briefing to analysts in which he recognised the core areas that it needs to address to ensure its future operations, including the decarbonisation of electricity generation, the electrification of transport, the need for biodiversity conservation and greater obligations to be part of a circular economy.

BHP says it cannot see a case for new thermal coal investments, noting there is “no appetite” for such investments, and it also warns that gas is likely to be leapfrogged by renewables, particularly in developing countries, and the long pay-back for LNG projects carries significant risks.

Rio Tinto, which sold off the last of its coal assets less than a year ago, has pledged to support renewable energy and climate action – and to “publicly argue against” government subsidisation of coal power – while using its significant clout to urge associated industry groups to do the same.

Globally renowned resource analytics firm Wood Mackenzie’s research found that jobs and exports from existing coal regions will be decimated if the Galilee Basin is developed for coal mining.

And it is inferior coal.

…the low energy, high ash coal in the Galilee Basin is inferior to the Australian / Indonesian / South African / Columbian export market average

IEEFA estimates that Adani’s proposed Carmichael coal of 4,950kcal energy and 26% raw ash content would currently be valued at a 60.5% discount to the Newcastle 6,000kcal benchmark, suggesting a current price of ~US$39.50/t.

Mining operators at the Galilee Basin could wash the raw coal, marginally reducing the ash content and boosting the energy content, but this would significantly increase production costs and would be subject to seasonal variations including water availability.

Of concern to the drought-stricken Queensland community are the severe water draw-down risks posed by the cumulative impact of multiple, huge coal mining plans for the Galilee Basin. The Adani Group alone wants to extract up to 12.5-billion-litres per year to 2077 from the Galilee Basin’s Belyando River for use at their proposed Carmichael mine, with the maximum total water potentially doubling this amount when coal “dewatering” is included.

So to sum up, automation means there would be very few jobs provided by a mine producing inferior coal which would use an enormous amount of water and cause job losses and production cuts in existing coal-mining areas as the market for thermal coal declines due to the global movement towards renewable energy.

And then there’s climate change…

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17 comments

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  1. Peter F

    Thanks again, Kaye.

    How can the ALP have allowed the lies about Adani to galvanise a move against THEM?

    After nearly a week, I realise how much I have been shocked and shaken by the results of this election.

  2. RomeoCharlie29

    Once again I am in awe of your ability to cut to the heart of the issues with a cogent collection of relevant information. The final paragraph particularly.

  3. Jaquix

    Politics is the art of the possible. Fact is if she doesnt “show willing” on this, we will end up next year with a LNP state government led by Deb Frecklington in Quensland. What State and Federal Labor should concentrate on is how to manage the Transition. Other (clean) industries need to be offered instead of coal. A determined policy announcement on this phasing out, with practical alternatives, is the best you can hope for. An industry based around assembling/building electric trucks, utes, cars, and buses (as is happening in Victoria) is the sort of thing that could make a difference.
    Its understandable, if youve ever been up there in mid-north Queensland theyre fiercely loyal to “the mines” because thats what gives them the jobs.
    Sad but thats the way it is.

  4. Kaye Lee

    BHP is also planning to invest up to $1.2 billion automating its 500-strong haulage truck fleet in its mining operations in W.A. and Queensland, and expects this to become progressively electric as “heavy duty EVs” become more competitive.

    It sees a roll-out of this technology from 2020-2023, depending on individual asset operations, following in the example of Fortescue Metals and others.

  5. ChristopherJ

    In a sane world, Kaye, a government would step into protect train and truck driver jobs, which are the ones being automated.

    In a sane world, mining companies would recognise that that they are given a social license as well as a mining license.

    Sadly, the only social responsibility these faceless corporations follow is to make as much money with as few people as possible.

    Only mass protest can turn this around. There were a few people this Friday around Cairns. Might join them next week if its still on.

  6. Kaye Lee

    Christopher,

    The speech from the BHP CEO was heartening.

    It took note of its so-called ‘licence to operate’, acknowledging that the mining giant’s operations exist within wider social and political trends, not to mention the scientific consensus which screams at the need to adhere to the Paris climate goals of limiting average global warming to around 1.5°C.

    It even cited the recent UN report warning of massive biodiversity loss, something that the Coalition government all but ignored.

    “(There is an) accelerated social and political push to achieve zero emissions from stationary power to contain global warming to well below 2 degrees.” it noted.

    “Electric Vehicles (EVs) (will) progressively displace the internal combustion engine (ICE) as cost, range and charging constraints are overcome.”

    It contains hopes of pro-EV policies and early phase out of coal that the re-elected Coalition government has rejected, and it uses terms such as the “circular economy” that the Coalition would likely never heard of.

  7. king1394

    One of the signs I saw before the Federal election said ‘Stop Labor’s Adani mine’. I guess the designer preferred a Liberal Adani mine. The people of the State of Queensland have clearly indicated that they have fallen for the Adani promise of jobs and prosperity, and they will punish the State Labor Government if they obstruct the mine (or mines) further.
    In demanding a time limit on the approval process, the Premier of Qld is showing that she will respond to the electorate, and we cannot fault her on this. We ourselves have failed to engage with the many people who believe Adani’s lies and who also know how merciless our socialsecurity system is to unemployed people.

  8. Jack Russell

    The coming three years will utterly destroy their “best economic managers” meme. The replacement meme will most likely be “the election we weren’t smart enough to lose”.

  9. Frances

    Quote from: https://www.sbs.com.au/news/the-feed/interactive-everything-you-need-to-know-about-adani

    Interactive: Everything you need to know about Adani So how many jobs will the project create?

    1464 jobs:

    But this is the net number of new full-time equivalent jobs, both direct and indirect, that Adani’s special witness, Jerome Fahrer, told the Queensland Land Court that plan would create, factoring in construction, ongoing employment and job losses from other major projects.

  10. Jexpat

    @Jack Russell

    They may end up stepping on more than a few of those landmines that they laid in anticipation of Labor forming government.

    Meanwhile, things are about to get a lot tougher climate wise on the rural folk.

  11. Kerri

    Many articles in the media are calling upon the rest of Australia to feel sympathy and understand that Queensland is not just a backwater populated by ignorant and selfish coal lovers but that we need to understand their fears and needs and that they will one day be more supportive of renewables.
    Sure! Ask me to feel sorry for them now?
    But I flatly refuse to give them any sympathy whatsoever when drought and natural disasters ravage their state.
    When exports of coal fall in a heap because the rest of the world has moved on
    When their environment and the Great Barrier Reef are destroyed by Adani.
    When a very select few get short term jobs with Adani and Carmichael and end up broke in the dole queue.
    No sympathy whatsoever.
    Queensland! Beautiful one day
    Stupid every day.

  12. New England Cocky

    Thee are unlikely to b any mining jobs if Adani is established because the entire open cut mine will be automated and run by satellite from Brisbane, or Perth or wherever. Meanwhile Australian agricultural enterprises of thousands of Lazy Nasty People voters will be put at risk by the Adani et al Galilee Basin mines polluting the Great Artesian Basin.

    Another example of LNP group unthink bought to you by the Mineral Council of Australia representing foreign owned multinational corporations and News Ltd the media conglomeration owned by a US citizen.

  13. Zathras

    One of the ironies of the election was the swing to One Nation in the Hunter, allegedly due to Labor’s lack of support for the Adani project.

    According to the Australian Research Institute – “The subsidised development of the Adani mine represents a threat not just to Newcastle Port but to all mines in the Hunter. With flat world demand, subsidising a large amount of new supply is economic madness”.

    In other word, if we mine another 25 million to 60 million tonnes of subsidised new coal into a flat world market the volume of coal mined and exported from the Hunter and Illawarra will decline and put further downward pressure on the price of coal and it’s going to put pressure on the already operating coal mines.

    Therefore the protesting Hunter miners have likely voted against their own best interests – like so many others.

    Even in Queensland coal mining provides just 1.1% of all Queensland jobs and comes in in far behind far bigger employers like health, education, retail, agriculture, public administration, construction, as well as accommodation and food services, which is heavily linked to tourism, and manufacturing.

    Fun times ahead. I wonder how the Adani saga will seem in another 12 months.

    Considering the coming economic storms gathering on the horizon, maybe the ALP have dodged a bullet after all.

  14. Paul Davis

    For goodness sake people, stop talking sense.

    The government, their right wing fellow travellers, their sponsors and donors, the media, the good burghers of north hooterville, et al, are not listening, are not interested and don’t care. None of the above will ever be persuaded by logic or evidence. Even after the inevitable environmental destruction and economic / financial disappointments, the hootervillians will blame ‘those effing greenies’ for delaying, obstructing or otherwise reducing their promised golden dreams to dust and ashes.

    And the worse thing you can ever say to these disappointed burghers will be ‘i told you so’. Labor and the Greens can write off north and central queensland for the next thirty years.

  15. RosemaryJ36

    When you take into account the recent confession by Exxon that, together with Shell, its research in the 1980s revealed the climate damage which use of fossil fuels would cause, and then funded climate denialists to hide the truth, it is indisputable that global corporations do not give a fig about anyone, as long as there are enough fools to enable them to continue making profits – and donations to complicit politicians!

  16. Keith

    Nothing to worry about really … creating wealth through land clearing, drawing too much fresh water from the environment, polluting the atmosphere with fossil fuel emissions, or industrial fishing are meaningless. It is just part of Economics 101, where externalities are not a concern. Rivers drying, fresh water lakes being drained, the Great Barrier Reef being stuffed who cares, the economy is going well for the rich. Don’t worry about Oceans warming. In 10, 20, 30 years when we drop off the perch it won’t bother us, so why should we care is the attitude of the super wealthy.

    Biodiversity is breaking down, but baby pictures are far more important. Want children to do well; nah, money in shares, investment properties and other enterprises are far more important, than their future welfare.

    Sadly, those attitudes are becoming more dominant.

    https://www.ecowatch.com/biodiversity-report-ignored-2638037822.html?fbclid=IwAR1F9hVuFqNmPGFZ2cP30TM2uHhA6AoSgEtHfZy5UMVY2XgdoA9vVH-0BCw

    https://www.mediamatters.org/blog/2019/05/21/ABC-News-spent-more-time-on-royal-baby-in-one-week-than-on-climate-crisis-in-one-year/223759?fbclid=IwAR3Yg3rnpggwne4O0VAkh7sYo8cRKx2XqAUmOL8b8VYkfRSipG0-xP53Y54

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