Newman government keen on Adani coalmine despite treasury advice
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Version 0 of 1. The former Queensland government planned to invest hundreds of millions of dollars with Adani in Australia’s largest proposed coal project despite the state treasury warning it was unviable. Fairfax has reported that a treasury analyst concluded Adani’s Queensland mine and port operations were “unlikely to stack up on a conventional project finance assessment” days before the Newman government said it would help the Indian conglomerate build a key rail line last November. Correspondence released under right-to-information laws show treasury officials were also concerned that Adani’s debt levels and opaque corporate structures, which include companies in low tax havens, made it a “risk”. The former deputy premier and state development minister, Jeff Seeney, who drove the proposal to get Adani’s rail line off the ground with taxpayer money, told Fairfax that “it never got to the point of a deal”. “There were negotiations and due diligence was under way as part of the negotiations for investment infrastructure,” he said. It comes after Guardian Australia reported that Adani stopped key engineering work last month in a move that raised speculation about whether it was retreating from the project. The company later said it was committed and ready to start substantial work in September but was reorganising its plans, citing delays in government approvals. However, Adani’s website shows it is yet to publish plans indicating it is ready to start work with the approval of federal environment minister, Greg Hunt. The Palaszczuk Labor government, which has ruled out backing Adani with taxpayer money or allowing dredging in Great Barrier Reef waters before the project received financial closure, has denied being the source of delays. Adani needs to secure 15 more approvals from Hunt alone under the Environment and Biodiversity Conservation Act. It must submit 14 mitigation plans to Hunt – four for the port, two for the rail line and eight for the mine – three months before it starts work. It must publish most of those documents one month before starting work, but none yet appear on the company’s website. Conservationists said Adani was trying to pressure the Queensland and federal governments into “fast-tracking approvals”. An Australian Marine Conservation Society campaigner, Felicity Wishart, said: “Adani’s statement they are ready to start work is not true. It appears they are seeking more special treatment from federal and state governments. “If they have done the work and are simply refusing to disclose the information, what have they got to hide?” A WWF Australia campaigner, Louise Matthiesson, said it was “strange that Adani would be pressuring minister Hunt to speed up the approvals process, when they clearly haven’t done their homework to meet the conditions on the approvals they already have”. “Until Adani fulfils their legal obligations, they are a long way from building a new mine, port or railway,” she said. Adani’s Carmichael mine proposal has been strongly opposed by environmental groups worldwide as it would open up the Galilee coalfields west of Mackay, which would produce more annual carbon emissions from burned coal than the rest of Australia combined. Its plans to expand Abbot Point coal port have also been criticised for the impact on the reef and marine wildlife from increased shipping and dredging. It is battling several legal actions by Indigenous and conservation groups, including a state land court challenge in which Adani’s expert witness conceded the project would not generate the 10,000 jobs and $22bn in state government payments the company had claimed. Fairfax reported that a Queensland treasury analyst, Jason Wishart, wrote that the fate of Adani’s ambitions in the Galilee hinged on its success in the Indian electricity market. However, the Indian parent company was “heavily geared” with debts of $16.4bn against assets of $21.5bn and “highly susceptible to cost shocks”, treasury correspondence noted. Wishart wrote to the then under treasurer, Mark Gray, in October saying it was “fair to say that there is not a lot of market support for investing in Galilee thermal coal projects at present”. Other officials raised questions about the state’s “exit strategy” should Adani’s investment go bad. One wrote that “any answers I provide are unfortunately ‘best guess’ based on the veneer of information we have to date”. Wishart wrote that Adani had not given enough information to “address sources of equity and debt”. |