(The opinions expressed here are those of the author, a
columnist for Reuters.)
By Clyde Russell
LAUNCESTON, Australia May 31 The world’s
biggest planned coal mine is once again lurching toward the
finish line as India’s Adani Enterprises moves ahead with a
final decision on its Carmichael project in Australia.
Even if Adani does approve the $4 billion thermal
coal and rail project in central Queensland state, the venture
is shaping up as a turning point for coal in Australia, with
consequences for the industry across Asia.
The first implication of the Carmichael saga is that it
shows that major coal projects in Australia need subsidies from
governments to be viable, undermining the industry assertion
that coal is the cheapest source of energy and has a major
competitive advantage in Asia.
While various Australian governments have invested in
infrastructure for mining in the past, the Carmichael mine had
been touted as proof that profitable ventures could be done
entirely by the private sector, with government support limited
to ensuring a competitive regulatory framework.
Much of the recent controversy over the mine has centred on
two issues, both of which go to the heart of just how cheap coal
is as a fuel source.
First, Adani delayed making a final investment decision on
the 25-million-tonne-a-year mine, saying on May 22 that it had
yet to reach a deal on royalty payments with the Queensland
While the details of the company’s talks with the state
government haven’t been made public, the main issue appears to
be Adani’s desire to have either a royalty holiday for the
initial period of operation, or extended payments.
For its part the Queensland government has been adamant that
Adani will have to pay the royalties due, but at the same time
sources within the Labor Party-ruled state have said the
government is considering flexible arrangements for the Adani
The issue has effectively wedged the state…