Adani’s Carmichael mine won’t alleviate fuel poverty – it guarantees it

The Carmichael coal mine in Queensland, Australia, had fuelled more than a decade of political debate before it was finally given the go ahead last month. 

Adani, an Indian-owned energy company, says the new mine will provide cheap, reliable electricity for millions of people in its home state of Gujarat, and has consistently downplayed concerns raised by environmentalists. 

The project, a 28,000-hectare open-pit thermal coal mine, will see millions of tonnes of one of the world’s most polluting fuels transported by train to the Abbot Point coastal terminal, just a few dozen kilometres from the Great Barrier Reef and its critically endangered ecosystems. 

A hot-button issue in Australia’s recent general election, Adani’s project nearly collapsed on several occasions. After failing to attract any private investment, Adani slashed its initial budget from $16 billion to $2 billion and insisted it would self-finance. However, numerous studies have shown that the Australian government has provided $215-385 million of taxpayer subsidies as well as a tax-free $100 million access road. 

Economists dispute Adani’s claim that the mine will create hundreds of new jobs in Queensland; a 2015 study into Queensland’s coal boom this decade found employment gains to be negligible despite massive sector investment. 

Adani’s CEO Jeyakumar Janakraj said in March that the mine would see fuel poverty in India and other Asian nations “alleviated”. But the company has repeatedly relied on beneficial legislation from the Gujarat regional government, including buying land at cheaper than cost and receiving relief from the threat of insolvency. 

Further, the government last year passed a law allowing Adani and other coal companies to charge artificially high electricity prices from consumers. The cost of a tonne of Australian coal has fallen more than 40 percent in a year and now sits at $70 per tonne. But Adani benefits from legislation allowing it to charge customers energy prices based on coal costing $120 a tonne. Contrary to what it says publicly, this cost pass through means Adani’s Carmichael mine will effectively lock millions of people in Gujarat into fuel poverty for at least a decade to come. 

Janakraj also claimed the mine would be “hugely beneficial” for climate change; thermal coal is among the most polluting of fossil fuels and accounts for 45 percent of global energy emissions despite providing only 28 percent of energy supply. 

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