Over the past few days, I’ve read a lot of concern about the potential for environmental damage that Adani may cause in Queensland. I suspect that this concern may be misplaced.
Let’s take the facts as we know them:
- Adani greatly exaggerated the number of jobs that the mine was liable to create when proposing the mine and has since revised it down from 10,000 to around 1400.
- Adani is having trouble obtaining finance from the banks. While there are a number of reasons for this, including banks not wanting to establish new associations with “dirty” industries in the current environment, the main reason is that banks have a long history of refusing to lend money to businesses who look unlikely to have a profitable future.
- Coal prices are tanking.
- The only way that Adani is likely to actually raise the money to go ahead with their mine is with a large Federal “loan”. Or subsidy.
Now, when you put these facts together, the following scenario seems the most likely:
Adani tells the Turnbull government that it’s having trouble raising finance. The Turnbull government makes a grand announcement that it’s using its North Australia Development Fund to lend or give the company the money to go ahead because they’re all about jobs and growth and this will enable the people of India to lift themselves out of poverty, so we can use some of the Foreign Aid Budget as well. Adani does some surveying, some feasibility studies, some ground work, some leg work, pays several related firms for related work, before declaring that the Queensland mine isn’t economically viable and the money’s all gone, but hey, thanks for thinking of us and while we didn’t actually make any money, you kept a lot of our subsidiary companies in work and everything falls apart before any port is built at Abbot Point.
Now if I can see this, why can’t the Federal Government? Well, there’s two possibilities: One is that they’re corrupt and happy to transfer money from the public sector to private firms in order for any largesse they may receive in return. The other is that they’re as stupid as they appear when they mumble their three word slogans and suggest that to get the Budget back on track we need get the economy growing because that’ll give us more revenue even though we keep insisting that we don’t have a revenue problem.
Of course, I am overlooking the possibility that when Adani tells them that mine is no longer viable that they decide that – unlike the car industry – it’d be a really, really good idea to subsidise them because of all the 457 jobs that the mine is likely to create.
Certainly hope your overall thesis is correct …..
“Coal prices are tanking.”
The irony – or is it a paradox – is that, should coal prices come back to economic levels, renewables will take off in a big way. For coal to continue to be ‘good for humanity’ the price needs to stay at uneconomic levels.
Go figure !
My guess is, it’s some mixture of corruption and stupidity. No matter which way you divide that it’s bad.
My wish for Christmas and the New Year is that someone in government – anyone – understands what is actually needed for the revenue problem that isn’t. Make sure that everyone pays their fair share of tax – then we won’t have to worry.
I am supremely hopeful that Adani will pull the plug before the feds hand over anything. Gotta have hope right ?
Why and how coal (and oil) is and will be produced at a loss has been neatly explained by the Australia Institute’s Richard Denniss:
“Imagine you owned an ice cream van parked by the beach and your refrigerator broke. No matter what you paid for the ice cream, you should sell it for anything you can before it melts. Some money is better than no money.
“Now imagine that you owned billions of tonnes of coal and you thought that in 20 years time new technology or new global restrictions meant you might not be able to sell it. We have heard for decades how Australia had ‘hundreds of years’ worth of coal, but now we are trying to sell it in a few decades. The green paradox says that talk of future emission reductions can cause an increase in current coal production. Indeed, global coal production has risen 50 percent since the world first agreed to reduce emissions in 1992.”
The Age 24/12/2015
By way of observation, it seems to me they are more likely incompetent than stupid.
If you look at the progress in chronological order, Adani purchased the Greenfield/Carmichael mine and Abbot Point in 2010. The Newman government was elected in March, 2012 and was, from the outset, ‘helpful’ to Adani. Adani was further assisted by the instalment of ghunt as miniature for the environment in 2013.
UNESCO’s World Heritage Committee (WHC) had flagged the Great Barrier Reef (GBR) as being in danger, prior to the commencement of any Adani activity. The WHC is advised by the “International Union for Conservation of Nature” (IUCN), an odd and disparate group. Ghunt’s travel claims, from near on day one of his appointment, was one of the most extravagant in the rabid government. His travel destinations were also odd. Stories then started surfacing of a ‘whole of government’ approach to lobbying the WHC, through members of IUCN. There is a table in this article well worth a look;
http://www.google.com.au/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwjW4qaLrPPJAhWkPKYKHbFqCREQFggbMAA&url=http%3A%2F%2Fwww.abc.net.au%2Fnews%2F2015-05-11%2Fgovernment-outlines-travel-costs-to-lobby-for-barrier-reef%2F6460740&usg=AFQjCNHO9uLp8tYNbWWdgiSA5UARcp3ZgA
In February, 2015, Newman met his political demise. In March, 2015, the rabid government released its ‘Reef 2050 plan’, which was seen by some as a platitude to the IUCN, who were to advise the WHC prior to the release of the final report on the GBR in May, 2015. It worked! It is the closest replication of the Sepp Blatter playbook of manipulation that I can think of.
I can only imagine that their combined genius was so engaged with the manipulation, they missed the tanking prices and completely underestimated COP21. They also failed to notice the publication of the corporate tax avoiders/minimisers, which turned the tide of public opinion, at least to some degree, against corporate welfare. Notwithstanding the publication of that list was required by the Gillard/Rudd government and the rabid government was unable to stop it (although they did water it down a bit).
I understand your normal bailiwick is satire, Rossleigh. While I was verifying some of the dates I found some source material for future articles for you. The first is the Adani website,
http://www.google.com.au/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwjSwYfft_PJAhXFxqYKHRjmBU4QFggbMAA&url=http%3A%2F%2Fwww.adanimining.com%2F&usg=AFQjCNE4fgrLI_KOZayX6YqsYyK90kH2SA&bvm=bv.110151844,d.dGY
The second is ghunts wiki entry which states he ‘graduated as a Bachelor of Laws (with First Class Honours), where he won a prize for a final year thesis he co-authored entitled A Tax to Make the Polluter Pay’. Thank you for the article. Take care
“stranded assets”. the words the capitalist markets dare not speak in regards to oil and coal. But they will eventually nominate so many of the assets listed on fossil fuel companies balance sheets and then we will see drastic change. It is creeping in now, eventually the creep will become a landslide. It is so glaringly obvious the Galilee Basin is a stranded asset. A big reason why the banks won’t touch it. They don’t pay their internal analysts a shitload of money for nothing….
I’m comfortably confident not an once of coal will ever make it to port from the Basin.
@GlennK I trust, in my invariably simplistic way that you are right (as in correct, not from the other side of the railway line).
Now, that’s Kafka-esque enough to be true with the intelligence of this ruling rabble!
Manufactured statistics from the LNP Member for Dawson, George Christensen:
“Fighting for local jobs
George is an active proponent of the Abbot Point Coal Port expansion and associated Galilee Basin mining development which will provide an estimated 28,000 jobs.”
George welcomes your comments on his web site:
http://www.georgechristensen.com.au/have-your-say/