With a Labor government in Queensland looking increasingly likely, the party’s commitment to removing state subsidies to the Galilee coal and associated rail projects is putting the viability of Adani’s $15 billion Carmichael mine in jeopardy.
According to Tim Buckley, director of energy finance studies, Australasia for the Institute for Energy Economics and Financial Analysis, the commercial viability of Adani’s proposal is now “highly questionable”, with Labor’s refusal to subsidise the project bringing the focus back to “key questions of financial viability and strategic logic in the face of the structural decline of seaborne thermal coal markets”.
On the list of Labor promises to save the Great Barrier Reef is:
- not helping fund a private rail line for a private commercial project
- ensuring that dredging does not go ahead until Adani has demonstrated its project has financial close
- banning dredge spoil dumping in the Great Barrier Reef World Heritage Area
- not supporting to dumping dredge spoil from Abbot Point onto the Caley Valley Wetlands
- repealing the Newman Government’s water laws
“Labor’s policies will see the removal of numerous taxpayer funded subsidies as diverse as buying dredge spoil, co-funding a foreign billionaire owned private rail line, allocating free water permits and funding a new single purpose water channels for 200 kilometres to the Carmichael proposal,” Mr Buckley said.
“The commercial viability of Adani’s Carmichael proposal without this government support is highly questionable.”
Adani, however, has said the projects will go ahead with or without government support, AAP has reported.
Adani’s proposal of up to nine mega-coal projects would see an additional 300 million tonnes a year of thermal coal flood the export market, which has seen price declines of 60 per cent over the past four years.
Mr Buckley said increasing the global supply by 30 per cent would further depress prices and was against Australia’s interests.
“There are serious questions for the incoming executive in Queensland to examine how and why such lavish promises by way of enormous public subsidies were made to the Adani group in the face of conventional economics and our, and many others, continued analysis that showed this proposal was unbankable on commercial terms,” he said.