Comrade Campbell’s communist coal struggling

From Crikey’s Paddy Manning:

It speaks volumes that Australia’s largest coal project is now so completely dependent on government financial support.

But as the NSW government discovered with the Cobbora coal mine it hoped to sell off — underpinned by subsidised off-take agreements with power stations — even over-the-top state subsidies might not be enough to make an uncommercial project viable.

Queensland funding would be conditional on opening the infrastructure up to the other possible users in the Galilee, but, as Crikey wrote here last week, the two other major proponents are struggling to get off the ground. The scenario canvassed in today’s Courier-Mail, with not one but two state-funded rail lines built to the Galilee, is exceedingly unlikely.

Gina Rinehart’s Hancock Prospecting partnership with GVK is years away, mired in financing difficulties and a corruption scandal back in India, while Clive Palmer said yesterday his Waratah Coal was unlikely to take upNewman’s offer.

Palmer’s spokesman told Crikey the Newman announcement was pre-election political spin: “a good news story on the back of high unemployment figures”. Palmer remains miffed at the support for his two Indian rivals in the Galilee, and implacably hostile to Newman. As the spokesman said: “On one hand this government wants to sell assets and now they want to invest in helping one company.”

…Adani Mining is moving steadily, aiming to take a final investment decision by the end of next year and to produce first coal by 2017. Even with the finance it still has billions to raise and there are questions about the commitment of its partner in the rail project, Korea’s steelmaker POSCO.

There is a long way to go.

The subsidy list is embarrassingly long:

  • no royalties
  • hundreds of millions of dollars for infrastructure
  • removing the carbon price and mining tax
  • $1 billion loan from Bank of India
  • personal dispensation for Adani from India’s drive toward coal self-sufficiency
  • favourable coal price terms from Indian power plants

The only benefit left is the volume growth accounting entry as the jobs created will simply displace those in other mines as a result of lower coal prices.

But by then Comrade Campbell will be elsewhere, perhaps Canberra.

Comments

  1. ‘But by then Comrade Campbell will be elsewhere, perhaps Canberra.’

    Or Majorca. Or the Caymans……

  2. the main benefit is increased emission of CO2 and other polluters

    Liberal hater toward environment is bigger than their love toward free market

  3. Extraordinary… Hope Glencore is paying attention to this arrangement. If this madness persists they might just be worth a cheeky put option or two.

    • Mate, coal, thermal coal, is dead. Glenore have their QLD mines on standby for most of Dec, and it may eventuate they do not re-open them.
      Emerging technologies are rapidly taking the place of coal as source of energy for power generation, Leviathian said be knew of a technology which was going to keep coal and LNG sidelined forever, but he hasn’t pulled the rabbit yet.
      Extraordinary advances are being made in solar and graphene technology for energy storage that even in Australia with a fully developed energy generation system, the generators and transmission systems will not be refurbished at the end of their working life. That country up in central QLD is best, most valuable, left as grazing country. Might be able to sell a few head to the Chinese, with the TF or CP or GR brand. WW

      • And don’t forget all the beautiful gemstones! We small sapphire diggers have very little environmental impact compared to Gina and we don’t want her ploughing a railway through our world-class deposit.

      • That sounds truly insane! I can’t think of any possible reason to subsidise it other than a stream of royalties. Any influx of jobs it might create would be short-lived – but maybe Campbell hopes it will help win him another term.

  4. that subsidy list is a [email protected]#$%g disgrace!
    We are virtually paying them to come and take our resources away.
    If we already know about the subsidy list then imagine what the state opposition will do with this info when campbell tries to talk it up
    How can anyone think this is a win for the state/ country, and more unbelievable is that the pollies think they can get some GOOD mileage from it
    The short term political vision in Australia is fucking this whole country… man up boys !

    • Yep. All Australian politics is about not letting the economy rebalance and housing/dollar reset.

      As someone above said we are actually paying for them to come and take our resources away. That is seriously funny (and seriously depressing).

    • You got the point exactly right. QLD gets NOTHING out of this.

      The people of QLD are being sold down the river so that somebody in India can become really, really, really rich, all at the expense of Indian and Australian taxpayers.

      Oh, and Campbell claims it’ll create 15000 jobs, probably all on 457 visa.

      • I suspect that’s all Campbell wants – to be able to crow about the number of job created.

        Except without any wider benefits for QLD it’ll be like the proverbial economic boosting digging and refilling of holes. Without the refilling bit.

      • refer to Reus comment above – Any jobs, must have jobs, cannot let economy rebalance or reset.

        Look at the FTA, look at this rubbish, we are selling the country to prop up the economy and the dollar, basically so the housing ponzi doesn’t collapse.

      • Locus of ControlMEMBER

        I concur.

        This seems to be all about Qld’s job numbers, econ’ growth, export values, etc. Basically I think Newman’s just looking for a healthy bottom line (I.e. $) value he can skite about.

        Ironic really. He let go all those public servants… How many was it again? If this project passes all those employed on it will be public servants by proxy any how. After all the gov’t will be footing the bill through all these subsidies, basically “paying” their wages, albeit through an intermediary.

        Seems rather pointless really. Let some people go, pay for some more, back to square one on your job figures. Myeh.

      • Exactly Locus – pointless recycling of jobs from somewhere they might have done some good, to the useless busywork of Galilee.

        The negligence is breathtaking, and once again demonstrates that no smoke and mirrors BS is off limits when political careers are at stake.

        This will cost QLD dearly, at a time when it really can’t afford it.

        What else should we expect from a state government that basically lies to the electorate about the financial implications of the 99 year lease of publicly owned assets.

      • Locus of ControlMEMBER

        Slambo, makes you want to bang your head against a wall, doesn’t it? The sheer pointlessness of it!

        Sure, I can “understand” the heart of it: political point scoring, ideology, appeasing interest/ lobby groups. Therefore, public service = bad = must be culled. Private enterprise (that makes little economic sense, although I can see how it makes political sense) = good = must be supported irrespective of the cost. A few players get shuffled around the board, but the net outcome to society = status quo or worse than before. Arrrrrghhhh!

        Time to let go of the last remaining vestiges of optimism & idealism (you know, that government should act for the good of people, work towards a better future for all, etc. pffft, dreaming…) & capitulate to cynicism & reality methinks (& perhaps become a rent seeker with the rest – seems to be a winning strategy).

  5. Hill Billy 55MEMBER

    The absolute arrogance of the Premier and his cohorts.

    They have said they wont do anything on the sales of Qld’s assets until after the election, and here they are pledging the money they’ll receive to this white elephant months before the election.

    And some people think he’s doing a good job!!!!!!!!!!

  6. ResearchtimeMEMBER

    Don’t worry about it, it will never get off the ground…

    Are you sure about no Royalties?

    • Despite my moniker I left Qld 4 months ago. That is best way to short Qld – leave. The writing has been on the wall for ages. I mean the LNP screws tourism’s future while promoting coal, gas and sugar – it’s bizarre. BTW life is beautiful in nthn NSW!

  7. Subsidising giant foreign owned resource companies – ok.

    Subsidising our own kids who can’t get trained or jobs – not ok.

    Seriously voters, how stupid can you be?

  8. “paying them to take it away”

    This is not new, back in the 1970’s there was a mineral “boom”. Utah Coal , a large USA owned multi- national was leading the pack.
    The Mining unions commissioned cost analysis of all govt. subsidies to the mining operations in Australia . The finding was … that we paid them to take it away. Rex Connor ,the Minister for Mines in the Whitlam Govt. was planning to Nationalise the miners ….. Whitlam Government gone.
    Well Comrade Newman is brazenly putting the information out there this time, we will see how gullible or not the voters are. Back in the 70’s the Miners Union report was not widely known of.

  9. It is never going to happen.

    Can-Do got all puffed-up at the thought of Sydney being the “Global Infrastructure Hub” (WTF?) and needed to get all ‘State vs State’ on the world with this nonsense.

    He might as well dust off the motor vehicle assembly lines at Acacia Ridge or lob a dopey bid for the submarine deal.

    • No worries. The flow-on benefits from the G20 being held in Brissie should be enormous.

      One can just imagine the fond reminiscences of attendees as they return home waxing lyrical about the charms of Brisbane.

      “….most stinking hot fuckin’ place I’ve been in years”.