Note: This is the fifth story in a five-part series that examines how the Adani and Carmichael coal mine has divided the Australian public and in the process, sparked fierce debate on issues such as coal-based energy, energy financing, jobs and the rights of indigenous people. Read the first, second, third and fourth parts.
In May 2010, Kevin Rudd, the then prime minister of Australia, announced a new tax of 40% to be levied on mining activity. A little over a month later, Rudd had lost his job.
The mining industry had come together to launch a fierce campaign in television and print media against the tax. Between May and June, $22 million (AUD) was spent on the campaign, at the end of which Rudd found himself losing popularity and was felled by his party colleague, Julia Gillard. Within a week of being sworn in as prime minister, Gillard reached an agreement with mining companies on a lower tax rate.
“Mining is vital to Australian politics. No government in Australia can survive if it is hostile to mining,” Paul Williams, senior lecturer in politics at Griffith University in Queensland, told me.
That would probably explain why the Adani group’s coal mine has received the backing of almost all political parties in Australia. The only opposition from a political party has come – unsurprisingly – from the Australian Greens party, a party with environmentalism at its core.
Since the mine was first proposed in 2010, the Adani project has faced considerable headwinds owing to large-scale protests due to potential severe negative climate impacts, refusal of the traditional owners to part with the land on which the mine is to be built and progressively complicated financial scenarios. But the political support for the mine has been dauntless.
As the protests against the mine were gathering momentum, in August 2016, Matthew Canavan, the minister for resources and northern Australia in the Australian federal government, wrote an opinion piece in The Australian, the country’s largest selling national newspaper, titled ‘Mining is central to Australian history and has a strong future’. He argued strongly for further investment in the mining sector and earmarked the Adani coal mine as having the potential to contribute significantly to the development of northern Australia. “If the mine goes ahead, it will help develop a genuine frontier of our nation,” Canavan wrote.
The ‘frontier’ Canavan wrote about is the Galilee basin – one of the largest untapped reserves of coal in the world estimated to contain 20 billion tonnes of coal – covering an area of 247,000 square kilometres in Central Queensland.
Also read: Supreme Court Orders Further Probe Into Environmental Violations at Adani’s Mundra Port and SEZ
At the time the Adani group’s coal mine in the Galilee basin was proposed, it was not the only one. There were proposals by other companies to mine coal in the untapped basin. However, between then and now, the financial outlook for new coal projects has been considerably altered due to changing dynamics of the world coal market in which the prices of coal have remained volatile – at best — and the forecast of a saturated global coal market. Globally, the environment for new coal projects is unfavourable as the world stares at catastrophic effects of climate change, and nations face the uphill task of meeting their emission targets as agreed in the Paris agreement. As a result, all mining proposals in the Galilee basin, other than the Adani project, are now stalled at various stages ranging from pre-approval to being up for sale.
“All these other projects in the Galilee basin are sitting as zombies. All the talk is only about the Adani project”, says Adam Walters, principal researcher at the energy consulting firm, Energy and Resource Insights.
Future of energy
Prospects for future coal mining in Australia are now represented by the Adani group’s project. The Labor party-led Queensland state government and the Liberal Party-led coalition that heads the federal Australian government have firmly put its weight behind the project. The two formations are bitter rivals in the political arena, with the Labor party tending to a more Centre-left political positioning, while the Liberal party tends more towards the Centre-right. Though, the extent and nature of support for the Adani project extended by the two formations have differed – even varied – they have maintained that the project is crucial for the future of Queensland and Australia.
The federal government has expressed support for the Adani project to receive a $900 million concessional loan through its Northern Australia Infrastructure Facility (NAIF). Senior ministers in the federal government, including the deputy prime minister, have written to the Chinese government assuring it that the Carmichael coal mine has been approved (according to recent reports, the Adani group is seeking financing from a Chinese state-owned enterprise). The Queensland state government has granted the Adani group a royalty holiday under which the Adani group would be exempt from paying a large chunk of the annual royalties that would otherwise be due, and it could cost the Queensland government $320 million (AUD). The local councils of Townsville and Rockhampton — the two towns the Adani group plans to use as hubs for its fly-in-fly-out workforce – have announced that they will contribute $31 million (AUD) to build an airstrip to be used by the Adani group.
The committed political support for the mine has been matched by equally committed groups of activists and citizens who have organised street protests, road shows, community events and social media campaigns against the mine. Bob Brown, co-founder and former leader of the Australian Greens party, and also someone who has brought organisations together to form the ‘Stop Adani alliance’, feels that this is the biggest campaign in over 40 years. “This is the environmental issue of our times and the community has stood up and responded brilliantly. And make no mistake, we WILL stop this mine”, Brown told me in a phone conversation.
The political argument in support of the Adani mine has been that it will bring jobs to regional Queensland, a region that suffers unemployment rates as high as 12% compared to the national average of 5.5%. Even Townsville, a coastal city in north-eastern Queensland has an unemployment rate of 9%.
“Unemployment is a huge problem in regional and northern Queensland. After the mining downturn, lot of people lost their jobs. New jobs have not been created,” Williams said. “So, this narrative of jobs becomes a potent political narrative,” he added.
The Adani group, the Queensland government, and the federal Australian government have foretold that the mine and the associated rail project would bring ten thousand jobs to Queensland. A prophecy that they have used against naysayers of the mine, by arguing that if anyone opposes the mine, they oppose jobs for regional Queenslanders. On the back of the ten-thousand jobs forecast, an argument has been built about the economic development that the project will bring to regional Queensland, and how that would mean more prosperity for regional Queenslanders and economic development for Australia. And that forms the crux of the political argument in favour of the federal government subsidised NAIF loan to the Adani group, as a project must be of ‘public benefit’ to be eligible to receive the loan.
However, there remains doubt over whether the project – if it were to go ahead – will create those many jobs. Appearing before the Queensland court on behalf of Adani Mining Private Limited, Jerome Fahrer, an economist formerly with the Reserve Bank of Australia, testified that the project will result in 1,464 net jobs. His estimate was based on complex economic modeling which factored in job losses in other industries such as mining, manufacturing and agriculture.
Despite Fahrer’s testimony, the Adani group and the political leaders who support the mine have continued to highlight the figure of ten thousand jobs as the project’s biggest selling point.
According to John Quiggin, Australian Laureate Fellow in Economics at the University of Queensland, the political support for the mine is now much more driven by ideology rather than economic logic. “It is highly unlikely that the ten-thousand jobs and the economic benefits of the mine will materialise. The political argument for the mine is now much more ideological than economic. The government is dominated by people who regard climate change as mythical and really want to push coal regardless of the economics,” he said.
Quiggin also argues that the $900 million (AUD) that the federal government proposes to grant to the Adani group could be better used to create employment by investing in infrastructure in support of agriculture. “There are alternate avenues where the $900 million (AUD) can be better used instead of investing in coal. So, there are deep-rooted ideological issues at play with a section of our political class wedded to the idea of coal”, said Quiggin.
Paul Williams agrees with Quiggin that the Adani coal mine issue is now dominated by ideology. “It has now become a deeply ideological issue with people who believe that coal is the way to cheap energy really pushing for the project. There are also a lot of Australians who believe that climate change is fake or don’t care about it. But awareness about environmental issues and the impact of coal is growing as we have seen with this campaign against the Adani mine. So, things are changing”, said Williams.
Clive Bean, professor of Political Science at the Queensland University of Technology disagrees slightly. “Given that all of the key parties apart from the Greens (the Australian Greens party) support the project, it is probably too strong to talk of it being an ideological battle at the national level. One can anticipate, however, strong, ongoing opposition from the Greens and environmental groups”, he said.
Bean, however, agrees with Williams’s assessment that awareness about environmental issues is growing. “Australia is in a transition phase with respect to clean energy versus traditional energy sources such as coal. As always, economics dictates strategies to a large extent, but the realities of what is acceptable are obviously changing rapidly,” said Bean.
A crucial election
The Queensland state elections are scheduled to be held on November 25, and Bean weighs in on the divide within Queensland. “There is a divide between the major metropolitan centres and the regional areas of the state, particularly in the north where the mine will be located”. He is of the opinion that in the larger urban centres of South East Queensland, opposition to the mine is greater, while there is support for the mine in regional areas, and particularly in the northern parts of the state where the mine is supposed to bring jobs and economic growth. “Thus the major political parties, particularly the Labor party which is under threat from the Greens (the Australian Greens party) in some seats in Brisbane, end up hedging their bets”, Bean added.
A fine balancing act needs to be maintained to reach out to voters in rural areas who are excited by the prospect of employment and economic growth if the Adani coal mine is built, and at the same time, appeal to voters in urban areas who are opposed to the mine due to its prospective negative climate impacts.
With elections less than a month away, leader of the Labour party in the state and the current Premier of Queensland, Annastacia Palaszczuk, took a definitive stand when she announced that her government will veto the prospective federal government-funded NAIF loan to the Adani group. Palaszczuk has been a strong supporter of the project and this move came as a surprise. She cited the elimination of conflict of interest involving her partner who works at the accounting firm that helped Adani with its NAIF loan application as the reason for her decision to veto the loan. But the public protests against the mine and surveys that have suggested that a large number of Australians are opposed to the mine and a majority are opposed to the granting of the NAIF loan to the Adani group would have also been on her mind.
The Wire has pointed out in an earlier part of this series that the Adani group’s project now depends critically on the prospect of receiving the concessional NAIF loan. A state government veto on the loan could put the project in serious jeopardy.
However, since the Queensland government is now in caretaker mode, the Premier needed bipartisan support to veto the loan. The Liberal National Party (LNP) – the opposition party in the state – did not support the veto.
Effectively now, the Labor party can only veto the loan if they are voted back into government in the November 25 election, which means that the issue of the NAIF loan to the Adani group will be one of the top-most issues in the state election. “It is the point of difference between the parties now. Some would say that it is the most crucial issue in these elections”, said Joshua Robertson, Queensland correspondent for the Guardian Australia.
Many, including the Adani group, will be watching the outcome of the Queensland elections with rapt attention.
The Adani group’s Carmichael coal mine and rail project has divided the Australian public. Broadly, support for the mine exists in rural areas where the narrative of jobs finds resonance and climate change scepticism prevails, while the mine is opposed in urban areas and metropolitan centres where a more definitive acceptance of the threats from climate change defines attitudes. The major political parties started out as firm backers of the project, and while the Liberal party remains steadfastly behind the project, the Labour party has signaled that it could go in the other direction.
Over the seven years that the Adani project has been a part of public debate and consciousness in Australia, the world has changed and there is increased recognition and acceptance that climate change is real and that coal is a major contributing factor. Public opinion in Australia, too, has evolved and moved more in the direction of realising the threats of climate change. But the extent of that shift in public opinion is a matter of debate.
Right now, there is a fierce ideological battle over coal represented by the Adani group’s project, and the future of the project could determine whether Australia chooses to remain pro-coal in an increasingly anti-coal world.
Richard Flanagan, one of Australia’s celebrated novelists and winner of the 2014 Man Booker Prize, believes that Australia is not doing enough and not taking the responsibility that it should.
“Australia needs to say no to this mine and show the way as a global leader on climate change. At a time like this, this kind of a project brings national shame to both Australia and India. Both countries should be playing a role in showing the world where the future lies and not give in to these dark forces of the mining industry. The mining industry has had too much influence in Australia for far too long. One must understand that the future of Australia does not depend on the profits of the mining industry,” he told me in a phone conversation.
“In Australia, there has been a vacuum of leadership when it comes to taking a clear stand on climate change. Politics has fallen behind, and it is common people instead who have led the way, and that makes me hopeful.”
Kabir Agarwal is an independent journalist whose writings have appeared in The Kashmir Walla, The Times of India, Mint, Al Jazeera English and The Caravan. He can be found on twitter @kabira_tweeting.