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Adani puts Galilee coal mine on hold pending recovery in coal price


The Indian mining and energy giant Adani Enterprises appears to have put development of its massive and controversial $16 billion Carmichael coal mine in the Galilee Basin on hold – until coal prices show signs of a solid rebound. Which could be never.

A report from brooking house Axis Capital in India this week quotes Adani management as saying that no capital expenditure is planned by the company for the project until there is “visibility” of a rebound in the coal price.

Given that international coal prices are at record lows, and most analysts predict further falls as the commodity faces increased competition from renewables, and major economies turn away from coal due to environmental and climate impacts, it suggests that Adani accepts that the Galilee Basin may not get developed.

This is in complete contrast to the comments attributed by Adani to the Queensland government, where it is apparently trying to sound optimistic about its go-ahead, suggesting it could re-start works within months.

The Queensland Labor government this week gave environmental approval for the mine, despite massive concerns about its impact on the Great Barrier Reef and on climate targets.

An Adani spokesman was quoted by the Brisbane Courier-Mail as saying: “The company is in a position to resume some of the development and other works on its projects within months of a mining lease being granted.”

#WTFnews" data-image-description="<div class="row"> <div class="heading-part"> <h1></h1> <h2 class="synopsis">Sources in the NHRC said this is the first time an active politician is being appointed to the post, which has remained vacant for over two years now.</h2> </div> </div> <div class="row"> <div class="leftpanel"> <div class="story-details"> <div class="main-story"> <div class="articles"> <div class="full-details"> <div class="share-social"> <div class="comments"> <div class="icons"> <div class="addthis_jumbo_share" data-url="" data-title="In a first, NHRC prepares for a political appointee" data-description="Sources in the NHRC said this is the first time an active politician is being appointed to the post, which has remained vacant for over two years now."> <div id="atstbx" class="at4-jumboshare at-style-responsive addthis-smartlayers addthis-animated at4-show"> <div class=""> <table> <tbody> <tr> <td class="at4-count-container"> <div class="at4-count">1.3K</div> <div class="at4-title">SHARES</div> </td> <td class="at-resp-share-element at-share-btn-elements at4-share-container"><a class="at-icon-wrapper at-share-btn at-svc-facebook" tabindex="1"><span class="at-label">Facebook</span></a><a class="at-icon-wrapper at-share-btn at-svc-twitter" tabindex="1"><span class="at-label">Twitter</span></a><a class="at-icon-wrapper at-share-btn at-svc-google_plusone_share" tabindex="1"><span class="at-label">Google+</span></a><a class="at-icon-wrapper at-share-btn at-svc-email" tabindex="1"><span class="at-label">Email</span></a></td> </tr> </tbody> </table> </div> </div> </div> </div> </div> </div> <div id="storycenterbyline" class="editor">Written by <a id="written_by1" class="bulletProj" href="">Maneesh Chhibber</a> , <a id="written_by2" class="bulletProj" href="">Manoj C G</a> | New Delhi | Updated: November 6, 2016 5:04 am</div> <p><span class="custom-caption"><img class="size-full wp-image-3739567" src="" alt="National Human Rights Commission, NHRC, NHRC member, BJP vice-president, Avinash Rai Khanna, NHRC bjp member, bjp member, nhrc politician, BJP, NDA government, india news, indian express" />Avinash Rai Khanna</span>IN A move that could have far-reaching impact, the BJP-led NDA government at the Centre is in the final stages of appointing a politician from its own ranks as a member of the National Human Rights Commission (NHRC). Sources in the NHRC said this is the first time an active politician is being appointed to the post, which has remained vacant for over two years now.</p> <div id="jwplayer_zQUNsur4_xe0BVfqu_div" class="jwplayer jw-reset jw-state-idle jw-skin-seven jw-stretch-uniform jw-flag-aspect-mode jw-breakpoint-4 jw-flag-user-inactive" tabindex="0"> <div class="jw-aspect jw-reset"></div> <div class="jw-overlays jw-reset"></div> <div class="jw-controls jw-reset"></div> <div class="afs_ads"></div> </div> <p>According to sources, BJP vice-president Avinash Rai Khanna is likely to be appointed as NHRC member in the next few days. Khanna, the party leader in charge of Jammu &amp; Kashmir, was a member of the Rajya Sabha till April this year.</p> <p>The chairperson and members of the NHRC are selected by a high-level committee headed by the Prime Minister, and comprising the Lok Sabha Speaker, Union Home Minister, Leader of the Opposition in the Lok Sabha, Leader of the Opposition in the Rajya Sabha and Deputy Chairman of the Rajya Sabha.</p> <p>Sources said the panel met last month to discuss names for the vacant post. “Some other names were also discussed, but his (Khanna’s) name was cleared. There was no dissent,” said a member of the panel. Section 3 of the Protection of Human Rights Act, 1993, which deals with the issue of “Constitution of a National Human Rights Commission”, says that only a former Chief Justice of India can be appointed NHRC chairperson.</p> <p>The four full-time members, as per the Act, should include a former judge of the Supreme Court, a former chief justice of a high court and two others “from amongst persons having knowledge of, or practical experience in, matters relating to human rights”.</p> <p>“While there is no bar on a political person being appointed to this post, it is certainly highly questionable. This sends a wrong signal. Couldn’t the committee find somebody without political links,” said a former NHRC member who did not want to be named.</p> <p>After his Lok Sabha constituency of Hoshiarpur became a reserved seat, Khanna did not contest the 2009 Lok Sabha elections. The Shiromani Akali Dal-BJP government in Punjab appointed him as a member of the Punjab State Human Rights Commission. However, Khanna quit that post after about 13 months, after he was elected to the Rajya Sabha.</p> <p>When it was in the opposition, the BJP had stressed the need to appoint persons of impeccable credentials to such posts. In 2013, then Leader of Opposition in the Rajya Sabha <a href="">Arun Jaitley</a> had opposed, in writing, the move to appoint former Supreme Court judge Cyriac Joseph as a member of the NHRC as Joseph was “perceived to be close to certain political and religious organisations”. However, most of the other members, including then Prime Minister <a href="">Manmohan Singh</a>, rejected the objections and cleared the appointment.</p> <p><b>WHAT DO THE RULES SAY?</b></p> <p>As per the Protection of Human Rights Act, 1993 NHRC chairperson and its members are chosen by a high-level committee. Prime Minister heads this search committee, which also has the Lok Sabha Speaker, union home minister, leader of opposition in both the houses, and deputy chairperson of the Rajya Sabha.</p> <p>The NHRC chairperson can only be a retired chief justice of India. NHRC has four full-time members, who are selected by the panel.</p> <p>One of the full-time members has to be a retired SC judge and another member should be a former chief justice of a high court. The two other members should have “knowledge of, or practical experience in, matters relating to human rights”.</p> <p><b>WHO IS AVINASH RAI KHANNA?</b></p> <p>Khanna was a Rajya Sabha MP till April this year, when his tenure ended. Earlier, he contested Lok Sabha elections from Hoshiarpur constituency in Punjab.</p> <p>In 2009, Hoshiarpur became a reserved seat and he had to leave the electoral battle. The Badal government appointed him as a member of the Punjab State Human Rights Commission, which Khanna quit after 13 months, when he was elected to the Rajya Sabha.</p> <p>He is currently the in-charge of Jammu and Kahsmir BJP.<br /> <b><br /> BJP HAS CHANGED ITS STAND</b></p> <p>Interestingly, the BJP seems to have changed its position on the appointment of a political person to the NHRC.</p> <p>In 2013, the then leader of opposition in the Rajya Sabha, Arun Jaitely had opposed appointment of retired SC judge Cyriac Joseph on the ground that he had political links.</p> <p>Jaitley had written a letter to the then PM <a href="">Manmohan Singh</a>, who, however, had rejected his objections to clear the appointment of Justice Cyriac Josesph in the NHRC.</p> </div> </div> </div> </div> </div> </div> " data-medium-file="" data-large-file="" class="aligncenter size-large wp-image-69935" src="" sizes="(max-width: 590px) 100vw, 590px" srcset=" 300w, 768w, 590w, 981w" alt="adani axis" width="590" height="75" />

However, the Axis Capital report (an excerpt of which appears above) quoted Adani management as saying that no capital expenditure is planned for the Galille Basin mine this financial year – and none would be likely in future without “visibility of revival in global coal prices.”

Given that the outlook for global coal prices is poor, this suggests that there will be no investment in Galilee, and underscores the difficulty it will have in attracting finance for a project that analysts says will not be economic.

Even the conservative International Energy Agency said late last year that it did not expect carmichael and other projects in the Galilee Basin to be built. “It is not likely that the above listed projects will be operational by 2020, if ever,” it said in its latest medium term coal outlook.

On the other hand, Adani’s solar projects are showing “significant progress.” The company is building the largest single-location solar project in India, a 648MW facility in Tamil Nadu. It already has a power purchase agreement in place.

Indian energy minister Piyush Goyal said last week that solar energy is now cheaper than coal,following recent auction results. This applies to domestic coal prices, and coal generation from imported coal, as proposed by Adani for the Galilee projects, is even more expensive.

One company, RattanIndia Power – a major private power generation company – said this week that it wants the Punjab government to approve the use of a 324-hectare site for a solar plant instead of a proposed coal plant. The economics of solar, the company stated, are better than that of coal.

In effect, it appears that Adani is telling brokers in India the reality of the state of the market, namely that it is impossible for it to get finance in the current economic climate.

As John Quiggin, from the University of Queensland, notes in Crikey today, there is a long list of banks and other funding sources that have announced that they won’t finance the project, or have pulled out of announced and existing finance arrangements.

This list list includes the Commonwealth Bank (formerly a big lender to Adani), NAB, the Queensland Treasury, the State Bank of India and global banks including Standard Chartered (another former big lender), Citigroup, JP Morgan Chase, Goldman Sachs, Deutsche Bank, Royal Bank of Scotland, HSBC, Barclays, BNP Paribas, Credit Agricole and Societe Generale.

The US and Korean Export-Import banks have been touted as possible sources, but they appear to have backed away, Quiggin says, adding that “even the Abbott-Turnbull $5 billion slush fund for northern Australia boondoggles, seen when it was announced as a rescuer for Adani, now appears unlikely.

“At the recent Northern Australia Investment Forum, the fund was the centre of attention, but Adani apparently didn’t get a mention, unless it was implicit in Minister for Resources, Energy and Northern Australia Josh Frydenberg’s claim that the government wouldn’t be investing in “white elephants”.

A comment is being sought from Adani’s spokesman in Australia.

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