Galilee Basin woodland.

Thousands of hectares of woodland would be cleared to develop the Carmichael coal project.

A legal objection to proposed Carmichael mine was heard in the Queensland Land Court over five weeks from Tuesday, 31 March 2015. More information is available here.

The Carmichael Coal Mine and Rail Project is a 60 million tonne per annum mine proposal in the northern Galilee Basin (160km north west of Clermont) and railway line connecting the mine site to the coast for export1.  The proponent, Indian-owned company Adani, have submitted a separate proposal to develop the North Galilee Basin Rail Project, a 310km alternative railway line, which is the company’s preferred option2.

Adani’s proposal would see coal from the Carmichael mine exported via the Port of Abbot Point, where Adani own the existing Terminal 1 as well as the proposed Terminal 0 development3.   Adani plans to export the coal to India, where Adani Group companies own and operate coal ports and power stations.

The Carmichael project would include six open cut pits and five underground mines, impacting an area of 27,892 ha4.  The mine would take 297 billion litres from underground aquifers5.

Adani put the cost of developing the Carmichael Coal Mine and Rail Project at A$16.5bn6.  The cost of producing coal from the Carmichael mine has been estimated at A$87 per tonne7, well in excess of the current price of Australian thermal coal, which is sitting below US$56 in November 20158.

An independent financial analysis of the project found it to be “unviable”9 and Adani’s house broker, leading investment bank Morgan Stanley, has reported that Adani has no intention to develop the Carmichael project until coal prices increase.  Morgan Stanley’s research report valued the project at $0 and noted, “while the company expects the environmental clearance to come through in F2H14, it does not plan to spend money on developing the mine until coal prices rise from current levels”10.

The Carmichael project was approved in May 2014 by the Queensland Coordinator-General11 and received EPBC approval from Federal Environment Minister Greg Hunt in July 201412. This approval was put aside after a legal challenge brought by the Mackay Conservation Group in August 2015. The mine was subsequently reapproved by Minister Hunt in October 2015, and is currently under challenge with a separate Federal Court challenge having been brought by the Australian Conservation Foundation.

To date, Adani’s target of commencing production in 2014 has been pushed out to 2017, with full production beyond 202213.

Concerns of those opposed to the project include Adani’s “record of environmental destruction and non-compliance with regulations”14. In Mundra, India, Adani faced multimillion-dollar fines after a government-appointed panel found “incontrovertible evidence” that the company violated environmental clearances and bypassed approval procedures, resulting in large-scale mangrove destruction, groundwater contamination, river blockages and fly-ash pollution15.

Great Barrier Reef

Coal from the Carmichael mine would be shipped through the World Heritage Listed Great Barrier Reef, via Adani’s proposed Terminal 0 at the Port of Abbot Point, which was approved by the Federal Government in December 201316.

To provide coal ships deep-water access at Abbot Point, the Port Authority, North Queensland Bulk Ports (NQBP) proposes to dredge over 1 million cubic metres (m3) of sea-bed inside the Great Barrier Reed World Heritage Area17.

In an April 2014 report UNESCO’s World Heritage Committee (WHC) noted the dredging and dumping for the Abbot Point development with concern, giving the Australian Government until 2015 to ensure the health of the reef, or risk the reef being place on the List of World Heritage in Danger sites18, potentially damaging the $6 billion reef tourism industry19.

Due to the international and local concern for Great Barrier Reef, an alternative, onshore dumping site has since been proposed for the 3 million tonnes of dredge spoil20. THe Queensland government recently removed a proposal to dump spoil on the nearby Caley Valley wetlands, which had been going through an assessment process under the Environmental Protection and Biodiversity Act using “preliminary documentation”21.

An alternative Queensland government dredging and dumping proposal has been put forward for approval. This proposal has been opposed by leading scientists22.

Water

Adani has applied for a water licence to extract up to 12.5 GL per year from the Belyando River for use at the Carmichael mine23.  The mine will also use groundwater that flows to the surface during the process of “dewatering” the open cut pits and underground mines.

According to the Supplementary Environmental Impact Statement (SEIS) submitted by Adani, “maximum impacts in excess of 300m are predicted” for the local water table.  Beyond the mine boundary, Adani’s groundwater model predicts water table levels to drop “typically between 20 and 50m” and “up to around 4m in the vicinity of the [Carmichael] river”24.

Railway Line and Landholders

Adani has put forward two possible rail routes for transporting coal from the Carmichael mine to the coast, but has signed an agreement with South Korean construction company POSCO to develop the North Galilee Basin Rail Project, making it unlikely the rail line included in the Carmichael Coal Mine and Rail Project proposal will be built25.

The North Galilee Basin Rail Project would be a 310km standard-gauge railway line from the mine site 70km east and then approximately 300km north directly to the Port of Abbot Point26.

The Revised Environmental Impact Statement (EIS) for the rail line shows it would use trains 4km long, each of which would carry around 25,000 tonnes of coal27.

The route of the North Galilee Rail Project proposal crosses highly flood prone country that regularly experiences flooding.  The construction of the rail line on major floodplains would substantially change surface water flows and lead to altered flood patterns, with major flooding risking a significant loss of food-producing land28.

The development of coal export railways between the Galilee Basin and ports on the Great Barrier Reef has been supported by the Queensland Government, who declared the Galilee Basin State Development Area (SDA) in June 201429. The SDA gives the government powers to compulsorily acquire properties along the rail corridor.  A similar SDA scheme for a coal rail line in the Surat Basin resulted in a reported 30% loss in land values30.

A Landholder’s Resolution rejecting the SDA has been signed by landholders representing more than half the properties in the SDA31.

Climate Change

When burnt, coal from the Carmichael mine at peak production would lead to 128 million tonnes of carbon emissions every year, roughly equivalent to the emissions reduction achieved by the Federal Government’s proposed Direct Action policy, which plans to reduce emissions by 131 million tonnes of carbon equivalent emissions per year32.

Further information

  1. Carmichael Coal Mine and Rail Project, Department of State Development, Planning and Infrastructure 

  2. North Galilee Basin Rail Project, Department of State Development, Planning and Infrastructure 

  3. Adani Australia 

  4. Carmichael Coal Mine and Rail Project SEIS Volume 2 Mine Studies, GHD 

  5. Carmichael Coal Mine and Rail Project SEIS Appendix K Water Balance Report, GHD 

  6. Carmichael Coal Mine and Rail Project, Department of State Development, Infrastructure and Planning 

  7. Gautam Adani’s billion dollar Australian coal dreams are turning black, First Biz 

  8. Australia Coal Price, Y Charts 

  9. Remote Prospects, IEEFA 

  10. Hunkering Down; Waiting for Resolution on Adani Power, Morgan Stanley 

  11. Queensland Coordinator-General’s Report on the EIS 

  12. Approval Decision, Australian Government Department of the Environment 

  13. Modi-fied rally in Adani stocks not backed by fundamentals, Business Standard 

  14. Research Briefing, Greenpeace Australia 

  15. Report of the Committee for Inspection of M/s Adani Port & SEZ Ltd., Mundra, Gujarat, Ministry of Environment and Forests  

  16. Abbot Point-Terminal 0 Approval, Australian Government Department of the Environment 

  17. Has the Great Barrier Reef just been approved for destruction by the Australian government?, The Guardian 

  18. World Heritage Committee Decisions 38 COM 7B.63Great Barrier Reef, UNESCO 

  19. Economic contribution of the Great Barrier Reef (2013), Deloitte Access Economics 

  20. Consortium scraps plan to dump, AFR 

  21. Abbot Point Port and Wetlands Strategy, Queensland Government Department of State Development, Infrastructure and Planning 

  22. Report by the Australian Coral Reef Society, March 2015 

  23. Application to take water from the Belyando River, Adani 

  24. Carmichael Coal Mine and Rail Project SEIS Appendix K1 – Mine Hydrogeology report, GHD 

  25. Adani, POSCO E&C to develop rail line in Australia 

  26. NGBRP, Queensland Government Department of State Development, Infrastructure and Planning 

  27. NBGBR Additional Information to the EIS-Appendix B Revised project description, GHD 

  28. Railroaded, Lock the Gate 

  29. GBSDA, Queensland Government Department of State Development, Infrastructure and Planning 

  30. Railroaded, Lock the Gate 

  31. Landholders want SDA scrapped, minister says it is needed, The Bulletin 

  32. Largest coal mine in Australia: federal government gives Carmichael go-ahead, The Guardian