Date:May 14, 2014

Approval given despite experts projecting environmental damage and commercial losses from Adani and GVK mines in Australia, meant to cater to India’s power needs

Coal development in the Bowen Basin just east of the Galilee Basin. The area is under threat from coal mining and in particular the loss of the Bimblebox nature reserve--home to the endangered black-throated finch. Aerials show the existing coal developments contrasted with the natural beauty of the area (Courtesy ©Greenpeace/Tom Jefferson)Coal development in the Bowen Basin just east of the Galilee Basin. The area is under threat from coal mining and in particular the loss of the Bimblebox nature reserve–home to the endangered black-throated finch. Aerials show the existing coal developments contrasted with the natural beauty of the area (Courtesy ©Greenpeace/Tom Jefferson)

The Queensland administration in Australia last week approved Adani’s mega coal mining project in the Galilee river basin. The giant mine would be one of the world’s largest. The approval was given in spite of a government-appointed body of experts pointing out gaps in the environmental impact assessment (EIA) report submitted by the company. Local groups have opposed the decision, saying the $16 million coal mine project would impact the Great Artesian Basin (below and adjacent to the Galilee river basisn), the world’s largest groundwater reserve, and inundate the Great Barrier Reef. American energy experts have questioned the commercial viability of the project.

Australian Broadcasting Corporation (ABC) reported that the Queensland state administration set aside the observations and recommendations of the Independent Expert Scientific Committee (IESC), a two year old government approved body, and cleared the mine,  considered Australia’s biggest, with 190 conditions. Spread over an area of 200 sq km, the Carmicheal Coal Mine and Rail Project is a greenfield coal mine in central Queensland. The project will have six open cast mines and five multi-seam underground mines, producing up to 74 million tonnes per annum (MTPA) of raw coal, equal to up to 60 MTPA of thermal coal for export for next 60 years. Later next month, the Federal Government of Australia will take a final call on the project.

Commercially not viable

Along with Adanis, Indian infrastructure company, GVK, has also secured three coal deposits in central Queensland in the Galilee river basin. Both the companies seek to export the Australian coal to meet India’s power requirements. However, a new analysis, titled Indian power prices, by US-based Institute for Energy Economics and Financial Analysis (IEEFA) says both the projects will be commercially unviable because of existing market conditions. “We question how building the two biggest Australian thermal coal mine projects in Australian history will actually help solve India’s electricity sector quagmire,” states Tim Buckley, director of IEEFA, Australasia. Buckley writes that these deposits in Queensland are extremely isolated. “The cost of building the required infrastructure means the combined capital and operating costs of the coal mines will be un-commercial,” the report states. Incidentally, the coal does not meet the Australian benchmark quality in terms of calorific value and ash content; the strip ratio for tonnes of overburden removal per tonne of coal produced is 17:1, which means after removing 17 tonnes of mine waste, one tonne of coal will be recovered.

By the time, these mines become operational in 2018, the price of one kilowatt hour of electricity generated from imported coal would increase by 40 to 90 per cent, says the study. “This puts the cost of imported coal-fired power generation 40-90 per cent above the current Indian wholesale price of electricity of Rs 3.00-4.00/kWh and two-to-three times the PPAs [power purchase agreements] written over 2006-2009 on proposed coal-fired power plants,” the report states.

Adani and GVK are yet to respond to these observations.

Threat to environment

As if commercial concerns were not enough, IESC has expressed its fear over the impact from Carmicheal deposit mining on groundwater in the underlying and adjacent Great Artesian Basin. IESC members in a report submitted in November 2013 said that  the members had “little confidence” in much of the modelling used by Adani and highlighted gaps in its data on the impacts of the mine on subterranean flows. The committee had also stated the Adani project will have a cumulative impact when added to other large mining schemes in the area and the risk of flooding and discharges from the mine into creeks and rivers of Galilee basin. Further, a port proposed on the northern coast of Australia at Abbot Point to carry the coal to India and other Asian countries, is likely to cause damage to Great Barrier Reef Marine Park due to dredging activities.

The approval accorded to these mines has not gone down well with grassroots organisations working in central Queensland. According to Lock the Gate Alliance that works on land and water resources, two large dams have been proposed for either side of the Carmichael river to hold mine-affected water, consisting of hydrocarbons and suspended solids. “This mine is going to lead to a permanent reduction in groundwater and a permanent change in water quality,” said Drew Hutton, president of Lock the Gate Alliance. “The questions about the impacts on water are yet to be answered so the Queensland government has been too hasty in giving this huge mine the tick of approval. Landholders rely on natural springs in the area and numerous endangered and endemic flora and fauna are also under threat,” Hutton added.

Flawed EIA

IESC has pointed out in its report in December that ecological issues associated with a range of threatened species, including the waxy cabbage palm, black-throated finch and groundwater dependent vegetation are yet to be addressed in the EIA report.

However, the Queensland state administration said that by starting coal mining and rail project, a large reserve of coal in the Galilee basin would open up, which will boost the economy. According to Queensland Premier Campbell Newman, the state has signed a 30-year  “partnership agreement” with the mining companies. As per a report by ABC, Newman said: “I have said famously or infamously that we are in the coal business – I again reiterate that today.”


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