By Leith van Onselen
Following last month’s confirmation by the Turnbull Government that the Adani Carmichael mega coal mine would not receive Northern Australia Infrastructure Facility (NAIF) funding for the rail line, I thought the project would die a quiet death.
Not so, with Fairfax today reporting that the Turnbull Government is seeking to provide backdoor funding for the project via the Export Finance and Insurance Corporation (EFIC):
An obscure government agency plans to indirectly support Adani’s controversial mega-coal mine by financing a business that will supply the project, it has emerged.
The Export Finance and Insurance Corporation, which provides loans to exporters, is also considering inquiries from other Adani suppliers, and held discussions with Adani representatives as recently as last month.
The revelations raise questions over whether the government is using back-door routes to prop up the Adani project, and will fuel debate over public funding for mining projects in Australia.
EFIC did not respond to Fairfax Media’s questions over what firms would receive or had applied for funding, the level of funding provided or the implications for the loans if the mine did not proceed…
At a Senate estimates hearing late on Thursday night, Export Finance and Insurance Corporation general counsel John Hopkins confirmed the agency was supporting businesses supplying the Indian mining giant…
EFIC chief executive Swati Dave confirmed it had “fielded some inquiries from Adani representatives” in mid-February, when “two or three people from each side had a chat”…
In September last year Trade Minister Steve Ciobo instructed EFIC to start supporting onshore resource projects…
Mr Ciobo said EFIC “has not been asked to finance the Adani Carmichael coal project” but Adani was entitled to seek funding.
The agency’s commercial account provides finance up to about $150 million, and lending decisions are at EFIC’s discretion. Under its national interest account, finance is uncapped.
Federal Labor says it will only support the Carmichael mine if it stacks up financially. In February, Opposition Leader Bill Shorten reportedly told a Townsville crowd: “If they want to use EFIC or any other form of government funding body to get the money – no, no, no”.
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This resulted in the letter of support from the then Deputy Prime Minister and Trade Minister, which said “The Australian Government is strongly committed to the opening up of the Galilee Basin” and that “We welcome foreign lending to support the development of major projects in Australia”…
The Australia Institute researcher who made the FOI request, Tom Swann said.
“The fact that Adani needs the Australian government to help it get money from other governments makes vivid the deep risks around this project that have seen numerous other banks turn away.”
“Adani stands to receive financial backing from local, state and federal governments. It has now become clear that the federal government has also been trying to help it secure funding from foreign governments.”
“Funding from foreign government banks is typically provided to support the involvement of foreign suppliers, instead of Australian suppliers,” Swann said.
MB has vigorously opposed extending government support to Adani from the outset on the ground that:
- Adani’s own hand-picked economic expert, Jerome Fahrer from ACIL Allen consulting, told the Queensland Land Court that only 1,464 full-time equivalent jobs would be created by the project;
- The project will create all manner of environmental externalities and degredation; and
- The mine will flood the world with more cheap coal, thus depressing its price and putting non-subsidised mines in NSW and QLD out of business, resulting in job losses.
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