Via the AFR:
Indian energy giant Adani has ramped up the pressure on the Turnbull government to use taxpayers’ money to deliver a $1 billion concessional loan for its controversial Carmichael mine with the company saying it would “review its options” if it missed out on the funding.
After more than seven years being held up in the courts and awaiting state and federal approvals, Adani chairman Gautam Adani said the board had made the final investment decision to proceed with the $16.5 billion mine in central Queensland.
But Adani has a $3.3 billion funding shortfall that needs to be filled before the project’s financial close on the $6.7 billion first stage of the mine, the rail and port project, which the Queensland and federal governments hope will open up a new coal mining region and create more than 10,000 jobs.
1400 jobs, actually. More to the point, why would Adani commit to the decision if it didn’t already have assurances from the Australian government on the concessional loan? It wouldn’t. But that would be corruption given the process is supposed to transpire via an at least nominally independent board at the NAIF.
Even then, though, it’s got to find banks stupid enough to give it the money, via The Australian:
Activists will ramp up the anti-Adani campaign against a possible federal government loan of up to $1 billion to the Indian conglomerate, after the company gave the green light to its $16.5bn Galilee Basin coalmine.
Activists will bombard federal MPs with phone calls, international banks will be pressured to pre-emptively rule out funding Adani, and a constitutional legal challenge is being considered should the government sign off on the Northern Australia Infrastructure Facility concessional loan.
After seven years of state and federal assessments and legal challenges by conservation groups, Adani yesterday announced its board had made a final investment decision on its controversial Carmichael coalmine project, allowing $70 million in pre-construction work, such as landclearing and road-building, to begin in September.
But the company still needs to secure finance from banks for the project before it can reach the all-important “financial close” for the central Queensland project.
The only reason the project has any life at all is that it is situated squarely in the middle of the One Nation’s fortress of central QLD. But, I put it to both QLD Labor and the Federal Coalition that they are playing with a national bonfire here.
Unless I’m misreading the national mood, Adani going ahead will trigger a virtual civil war. Activist groups across the country will unite to blockade the project legally and illegally for as long as it takes and it will draw support from across the political spectrum. I can’t visit a cafe in Melbourne that does not have “Stop Adani” plastered all over it.
The nation is already angry and feeling deeply betrayed by governments, in part owing to foreign interests. Adani is the kind of issue that could become a lightening rod for all kinds of grievances and unite generations. Thus the local calculus of a win for political parties that support it for central QLD could easily be overwhelmed by national and statewide backlashes. For instance, I can see such an issue throwing Malcolm Turnbull out in Wentworth where Greens already threaten.
In an age of lightening consumer activism that can destroy a brand virtually overnight, I humbly suggest that both government and business give Adani a wide berth. Follow Westpac’s wise lead.
