Carmichael mine approved, countdown to asset stranding begins

Federal Minister for the Environment Greg Hunt today approved the AU$16.5 billion Carmichael coal mine in Queensland’s Galilee basin. The mine will be one of the largest in the world, covering 200 square kilometres and producing 60 million tonnes of coal per year.

In approving the mine, the Queensland and now Federal governments have been accused of ignoring Independent Expert Scientific Committee warnings about water impacts, and Adani’s poor record of environmental and business practices.

Hunt’s approval of the Carmichael coal mine has turned the “dead cat in his in-tray” into a zombie that will do damage for generations. Despite the imposition of what he describes as “strict conditions”, the project threatens groundwater through both contamination and annual consumption of three billion litres. It also increases risks to the Great Barrier Reef through dredging, and the global climate given the annual carbon emissions it produces will be four times that of New Zealand.

“The Federal Environment Minister has laid out the red carpet for a coal company with a shocking track record to dig up the outback, dump on the Great Barrier Reef and fuel climate change. The environmental impact statement of Carmichael Mine reads more like an obituary column than a plan for development.” Greenpeace Program Director Ben Pearson.

Taking the fatuous “coal fights energy poverty” line of argument, Hunt also claims that the project will “provide electricity for up to 100 million people”, ignoring the fact India may not be able to afford more coal, and neglecting to mention that coal pollution already kills up to 115,000 people per year there.

Carmichael coal will inevitably increase this figure, while also increasing its huge US$4.6 billion health cost. That is assuming it doesn’t become one huge stranded asset following coal market decline and community opposition, of which the latter is heating up further in Australia following the release of anti-coal activist Jonathan Moylan.

Moylan – who issued a hoax press release from ANZ saying the bank had withdrawn a $1.2 billion loan for Whitehaven coal’s Maules Creek mine, temporarily wiping $314 million off the company’s share price – was handed a suspended sentence last week for one year and eight months.

He was fortunate to receive a good behaviour bond, avoiding a ten-year prison sentence and $765,000 fine, but by risking his freedom he kick started a national discussion on the threat reckless coal expansion poses to farmers, rural communities, the environment and Australia’s economy.

He has also helped shine a bright light on the dirty investment practices of many Australian banks, and the increasingly risky nature of investing in the dying coal industry.

Nowhere is this perhaps demonstrated more clearly than Whitehaven’s share price. Moylan’s hoax email drove a drop from $3.52 to $3.21, but it bounced back to $3.53 within an hour when trading resumed. However, since January 2013, the coal company’s shares have plummeted in the face of the slumping global coal price, closing at $1.45 recently.

Investors are abandoning coal projects, renewable energy is basically unstoppable, and as the world inevitably increases climate action the future will only grow bleaker for coal.

Adani’s Carmichael could start looking like a stranded asset risks before the first shovel hits the ground.

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