Conservationists are celebrating this morning after news emerged overnight that Adani’s Carmichael coal mine will not win finance from the National Australia Bank, a revelation which has left the Prime Minister with yet more egg on his face after he last week claimed that business leaders not prepared to advocate for the Indian mining giant “are playing games with our economic future”.
In a scoop published late last night the Australian Financial Review quoted a spokesperson for the National Australia Bank (NAB) as saying that the institution “is not involved and has no plans to be involved in any financing of the Carmichael coal mine”.
The bank was not available for comment at the time of press to confirm whether it’s entirely unwilling to back the project, but there’s no doubt the news deals a serious blow to the Adani’s ailing chances of attracting finance, something it has struggled to do for the past five years as it stumbles through the environmental approvals system.
If it gets the green light, the Carmichael mine would be the largest in Australia’s history and emit four times the carbon emissions of New Zealand. Importantly, it is also seen as a crucial ‘first mover’ for the opening up of the broader Galilee Basin because Adani is the only player amongst the nine mines planned for the untapped region that’s likely to be able to raise, or willing to expend, the capital needed to establish key infrastructure required to facilitate exports.
The National Australia Bank bombshell couldn’t have come at a worse time for Adani because it compounds a separate announcement made to climate advocacy group 350.org by Korean electronics giant LG last night. A non-binding off-take agreement for 4 million tonnes of coal it had signed with the mining conglomerate expired, an LG will not, in fact, be purchasing the coal.
The double barrelled blow is the latest in a lengthening list which has seen the Carmichael mine’s chances of success become increasingly remote, although the project has enjoyed staunch political support from the Federal Government, which has closed ranks and gone to extraordinary lengths to advocate Adani’s projects.
In an interview with The Australian newspaper last week the Prime Minister went as far as to call on business leaders to advocate in support of the mine because, he said, projects like Adani’s are the key to economic growth, despite the heavy environmental toll the uncertain project will take.
Considered together the nine mines proposed for the Galilee Basin mines would create more carbon emissions than entire nations like South Africa, the United Kingdom, or Italy. The hundreds of millions of tonnes of coal they would extract each year would be shipped through the Great Barrier Reef out of Adani’s other Australian interest, the Abbot Point Port near Bowen, which would be the largest coal terminal in the world.
Greenpeace Climate and Energy Campaigner Nikola Casule welcomed National Australia Bank’s apparent disinterest in Adani’s project, saying that “NAB has done the right thing by the reef and has become the 14th major bank to distance itself from the stranded asset that is the Carmichael mega mine”.
For the mine to be financially viable it would need the coal price to be roughly double what it has been in recent times, and critics have argued that the greatest challenge to the mine is its own business case.
Making matters worse is the fact that damaging stories about the $16.5 billion project are coming thick and fast, with the Commonwealth Bank ending its tenure as a financial advisor in August and being widely viewed as having rejected the idea of providing finance for Carmichael mine.
The project also became mired in the eye of a political storm last month after its Commonwealth environmental approval was rescinded by the Federal Court because the Environment Minister Greg Hunt had failed to consider conservation advice relating to two threatened species that will be impacted by the mine.
The government’s own solicitors conceded defeat before the case even went to trial and yet the government responded to the court decision it requested (literally – government solicitors asked the court to deliver the verdict it did) by mounting a major campaign attacking conservationists for supposed “vigilante lawfare” and “gaming the system”.
Chief Executive Officer of 350.org, Blair Palese, last night hit out at the government arguing that “NAB’s announcement is yet another sign that it’s time for Tony Abbott to stop forcing an unbankable coal project down the throats of a public and a market that has rejected it over and over again”.
The Treasurer Joe Hockey has also telegraphed support for the mine, dropping a series of hints last week that the government was preparing to help subsidise the mega mine — something which the government’s now deposed Queensland counterpart in the Newman government tried unsuccessfully to do — using funds from the $5 billion Northern Australia Investment Facility announced in the 2015-16 budget.
“While Tony Abbott clings to his unhealthy relationship with the coal industry, the rest of the world is ready to close the chapter on this dirty and outdated fossil fuel and move on,” Palese said.
Despite documents obtained under freedom of information laws also revealing that as the Newman government prepared to subsidise the mine by providing a soft loan for rail infrastructure, the state treasury was concerned the project was not even bankable, Abbott said last week that Australia will have “lost our sense as a nation” if the mining project does not proceed.
“We can talk all we like about being committed to economic growth but…if the Adani mine does not go ahead soon, we are crazy,” Abbott said.