Let it go:
Indian coal aspirant Adani has delayed an investment decision on its Carmichael coal mine after claiming the Queensland Government did not clarify the royalty regime the mine would operate under.
Adani has been keen for the Queensland government to delay the start of royalty obligations on the coal mine it hopes to build in Queensland’s Galilee Basin.
A final investment decision (FID) on Carmichael was expected from Adani this month, but a spokesman for the Indian company said no decision would be made until the Queensland government had clarified its royalty position.
“We are advised that the Queensland cabinet today did not consider any submissions and therefore did not make a decision on royalties for the Adani project. In light of this, Adani has deferred its board consideration of FID until the Queensland government makes a decision,” said a spokesman for Adani on Monday.
Let it go:
A politically wounded Ms Palaszczuk was last night accused of allowing a factional stoush — led by Deputy Premier and left faction leader Jackie Trad — to undermine her leadership and threaten the 10,000 jobs, direct and indirect, which Adani claims would flow from the controversial Galilee Basin mine.
The split in Labor is deep, with federal Labor leader Bill Shorten opposing a low-interest taxpayer loan of up to $1bn from the federal government’s Northern Australia Infrastructure Facility for the project’s 800km rail line.
There are concerns the delay also risks a lifeline to Arrium’s struggling South Australian steelworks, from which Adani said it would source steel for its rail line.
A royalties concession or deferral for Adani — worth up to $320m — was expected to be decided at yesterday’s cabinet meeting. But Ms Trad came out publicly beforehand and declared any “royalties holiday” for Adani would break Labor’s election pledge of no taxpayer subsidies for the mine. Cabinet’s expected decision on a royalties arrangement with Adani was discussed and deferred.
Let it go. It is a gigantic economic white elephant. The mine is high cost at around $100 breakeven as prices are at $73 and falling fast. Moreover, it is large enough to lower global coal prices further. Meanwhile, the marginal cost mines that will shut as a result are in NSW. These mines are more efficient than Adani which will need massive public subsidy to operate at all.
And that’s before we account for any externalities such as damage to tourism and global warming.
In short, the choice for Australia is to run efficient thermal coal mines out of NSW or to throw tax-payer subsidies at pure Indian resource nationalism that will make us all poorer.
Let it go.
