Abbot Point: onshore dump would favour Adani, say coal miners

The Queensland government’s plans to build an onshore dump for dredge spoil from the Abbot Point coal port – aimed at winning an immediate start to the $16.5bn coal project by the Indian company Adani – could render competing projects “financially unviable”, including one backed by Gina Rinehart. The state government has fast-tracked plans to dump millions of tonnes of dredged seabed on the environmentally sensitive Caley Valley wetlands, and has also promised to invest hundreds of millions of dollars in Adani’s rail line, to persuade the Indian company to be the “first mover” of the competing projects to open up the vast Galilee basin coal reserves. But the government could now face accusations of “picking winners”, with GVK Hancock – a joint venture between Gina Hancock’s Hancock Prospecting and another Indian company GVK – and also the state’s major rail freight operator arguing the rushed onshore dump plan could jeopardise other projects in the coal-rich region. The complaints pose a problem for the federal environment minister, Greg Hunt, who must consider them as he decides whether to grant environmental approval to the onshore dumping plan. They come as the Queensland premier, Campbell Newman, claims the estimated “10,000 jobs” from Adani’s Carmichael coalmine as evidence of his economic achievements as he campaigns for the state election on 31 January. Adani Australia’s chief executive, Jeyakumar Janakaraj, has joined the premier on the campaign trail, vowing the mine would proceed despite being boycotted by a number of major banks. State Labor says it also supports coal projects in the Galilee basin, but the opposition leader, Annastacia Palaszczuk, has said she has questions about some financial aspects of the proposed Adani mine. The state infrastructure and planning department is the proponent of the onshore dump, a last-minute alternative to a controversial plan to dump the dredged material in the Great Barrier Reef marine park which was facing lengthy legal delays. In late December the department allowed 10 days for interested parties to make comments on the plan as part of a fast-tracked process to win federal environmental approval. GVK Hancock’s submission was blunt. “We are very concerned the impacts [of the new onshore disposal plan] discussed herein will be detrimental to the cost and timing of our projects making them financially unviable in these difficult economic and coal market circumstances,” it said. The submission also said the new onshore dump plans – which overlap with GVK Hancock’s planned project – would make it impossible for GVK Hancock to meet all the environmental conditions imposed under federal environmental approvals it has already received. A spokesman for GVK Hancock said “the state government’s initial onshore proposal outlined a rail super loop over the top of our already approved rail loop and associated infrastructure” and the company was “working with government to ensure that all proposals at this site do not impact our proposed and approved infrastructure plans”. Adani and GVK Hancock’s projects have been in fierce competition, but the state government has always argued that getting the go-ahead for one of the proposed Galilee basin mega-projects would help other projects to follow. Adani has joined the Korean construction group Posco to build a 308km rail link – with a reported $450m in state government backing – while GVK signed a memorandum of understanding with the Queensland government’s privatised rail freight company, Aurizon, to build a 300km rail link from its planned mines to connect with Aurizon’s existing network and a separate export terminal at Abbot Point. Aurizon also says the onshore dumping plan jeopardises other projects, including in the already operating Bowen basin coal fields. “Aurizon Network is concerned that the proposal could significantly constrain our existing operations and future expansion of infrastructure ... This would in turn have a detrimental impact on the cost and timing of future expansion of the [coal freight] system] – including expansions required to deliver incremental tonnage increases for coal producers in the Bowen basin … At best, this would delay these ventures reaching financial close and at worst make them financially unviable,” it says in a separate submission. It said technical elements of the onshore dumping plan would “add delays to, and the price paid by, customers from the Bowen or Galilee basins, possibly to the extent of impacting new project viability”. Queensland’s deputy premier, Jeff Seeney, said the upfront cost to taxpayers of the new onshore dumping plan was not known because “commercial negotiations” could not begin until Hunt gave it approval. The plan had previously been costed at $300m. On 16 December the Queensland government extended a deadline for Adani to finalise financing for the project.