Vision this, from Resource Minister Josh Frydencoal:
There is a “strong moral case” to proceed with Adani’s $16 billion coal mine, Resources Minister Josh Frydenberg claimed on Sunday.
Echoing former prime minister Tony Abbott’s insistence that “coal is good for humanity”, Mr Frydenberg said the “most important” result of Australia’s largest coal mine is that it would help pull millions of people in India and other countries out of energy poverty.
Just one question, Mr Frydencoal, are you resources minister for Australia or India? What about the moral imperative sustaining Australian’s standards of living? Given the thermal coal glut, the crashing price, the closing mines, the cheap as chips assets, the damage to rising assets such as tourism, the accelerating global move to close coal down and punish those that do not deliver on emissions mitigation, what about some cost/benefit analysis for Australia?
Deloitte has done some:
Deloitte Access says the side-effect of China’s “investment binge” in infrastructure is there is “too much of pretty much everything” now, with global capacity roaring ahead “in almost all types of tradables” over the past decade.
It means a global deflationary pulse is now getting larger, with the clear potential for China’s construction slowdown to sharpen – meaning bulk commodity prices could fall further than expected.
“Such a breakdown [in commodity prices] wasn’t meant to happen given the glorious picture beloved of some analysts that saw a thousand steel mills bloom across China’s industrial landscape,” the Deloitte report warns.
“Remarkably, it is now cheaper to buy coal in China than it is to buy water. The upshot is there’s a giant game of beggar-thy-neighbour now under way. A truly remarkable round of cost-cutting in mining is proving spectacularly successful.”
With a breakeven somewhere around $90-100, the Adani mine is incredibly inefficient when compared to existing coal mines and will only serve to close them down. Let India buy those, Mr Frydencoal.
