IEEFA’s Director of Energy Finance Studies, Tim Buckley, was today called as an expert witness in a court challenge of the approval of a major coal mine in the Galilee Basin.

Summary of evidence given:

The Carmichael coal mine is not financially viable and unlikely to turn a profit.  

  • Evidence brought by expert witness for Coast and Country, senior energy finance analyst Tim Buckley of the Institute for Energy Economics and Financial Analysis, concludes that the mine is not financially viable and is unlikely to attract financing necessary to begin construction.
  • Mr Buckley brings evidence that the global demand for coal will peak in the near future and cites Professor Garnaut and Lord Stern who suggest the peak may have passed in 2013. As such the project is at material risk of becoming a stranded asset.
  • The coal from this mine is of a low quality compared to the Newcastle benchmark standard. Mr Buckley considers that as a consequence of low energy and high ash content, it will attract a 30% discount to the Newcastle benchmark price for thermal coal.
  • Adani has not incorporated a discount of anywhere near this magnitude and has started from what we would consider to be an indefensibly inflated price assumption. Adani assumes a coal price at double today’s futures price (US$59 in 2021).
  • Adjusting for these inflated assumptions, the project would be unlikely to turn a profit.
  • Adani has failed to nominate an expert witness in relation to the financial viability of the project. Adani’s expert witness, Mr John Stanford, did not examine this issue and “could not understand why the financial capability of the applicant has any particular relevance to the matters before the court”. In court, Mr Stanford summarised the project as ‘very high risk.’

 Adani will pay no corporate tax. 

  • Mr Buckley challenges the level of corporate tax that Adani’s economics expert Dr Fahrer of ACIL Allen assumes that Adani will pay during the life of the project.
  • Dr Fahrer fails to take into account the level of debt servicing required, and the fact that Adani’s parent and related companies structure appears to ensure that corporate tax that could be paid has a high probability of being derived in low tax jurisdictions. Mr Gupta has confirmed that Singapore is a coal-trading hub for Adani Enterprises.
  • Taken together with his assessment that project will likely fail to turn a profit, Mr Buckley concludes that there is a high degree of likelihood that Adani – a wholly foreign owned entity – will pay no corporate tax in Australia.


Adani’s Carmichael thermal coal mine is currently being challenged in a 5-week trial in the QLD Land Court.

Mining leases grant the authority to exploit coal that belongs to the people of Queensland. The Land Court needs to be satisfied that the mine proposal is viable, profitable, and that the benefits outweigh the impacts such that the project is in the public interest. The court must consider whether the mine will provide the long-term benefits to Queensland it promised – jobs, royalties and corporate taxes – relative to the negative impacts of the development – environmental and other costs.