Home >Companies >News >Australia court revokes environment nod for Adani mine

Mumbai: A rare lizard and an ornamental snake on Wednesday jointly stalled the $12-billion Carmichael coal mining project planned by Adani Mining in Queensland, Australia.

Overturning environment permissions for the mine, the federal court of Australia on Wednesday said environment minister Greg Hunt had “ignored his own department’s advice about the mine’s impact on two vulnerable species, the yakka skink and the ornamental snake." The yakka skink is a lizard seen mostly in Queensland.

The order, which came on a legal challenge by Mackay Conservation Group against the approval to dig Australia’s largest coal mine in Galilee Basin, comes as a setback to Adani Mining, part of the Indian conglomerate, which is facing weak coal prices and reluctant lenders.

Adani Mining is a part of an infrastructure conglomerate controlled by billionaire Gautam Adani.

The decision leaves Adani, which is yet to secure sufficient financial backing for Carmichael and had recently slashed its workforce on the project, without legal authority to begin construction, the Guardian report said.

Adani initiated the Carmichael coal project in 2010 with plans to develop a coal mine, a connecting rail link and the Abbot Point port to transport coal to India, but the A$10 billion project soon ran into protests from environmentalists.

The Australian Conservation Foundation (ACF) welcomed the ruling against the project. In an emailed statement to Mint, ACF said the federal court has rejected the government’s approval of Adani’s Carmichael coal mine, giving environment minister Hunt the perfect opportunity to reconsider his decision and reject the proposal this time.

ACF recently wrote to Hunt, drawing the minister’s attention to new evidence showing that Adani’s planned mega mine would pollute the basin’s groundwater and destroy 10,000 hectares of the habitat of the largest known population of the endangered southern black-throated finch.

“Greg Hunt must now review his approval of the Carmichael mine—and this time he should reject the disastrous proposal," said ACF’s chief executive officer Kelly O’Shanassy.

“In recent weeks, ACF has been talking to potential investors about the serious problems with this proposal, of which there are many. If it went ahead, this project would destroy wildlife habitat, damage precious artesian water and contribute to the global climate problem once the coal is burned. Many investors also feel the drop in the price of coal is making the project unviable," O’Shanassy said.

“We believe the weight of this new information means the minister cannot—must not—make the same approval decision he made before," she said.

However, a spokesperson for Adani’s Australian business pointed to what he called a “technical legal error" from the federal environment department, which the company believes has turned the approval to an adverse decision.

“Adani acknowledges the federal environment minister has consented to remake the July 2014 environmental approval decision for the Carmichael Coal Mine and Rail project after a conservation group’s judicial review application. It is regrettable that a technical legal error from the Federal Environment Department has exposed the approval to an adverse decision," he said.

The spokesperson said that the approval included appropriate conditions to manage the species protection of the yakka skink and ornamental snake.

“However, we have been advised that, because certain documents were not presented by the department in finalizing the approval, it created a technical legal vulnerability that is better to address now. Adani will await the minister and his department’s timely reconsideration of its approval application under the Commonwealth Environment Protection and Biodiversity Conservation (EPBC) Act," the spokesperson said.

The emailed statement also said the company is committed to ensure that its mine, rail and port projects in Queensland are developed and operated in accordance with Commonwealth and State laws and regulations.

The spokesperson said Adani is confident the conditions imposed on the existing approval are robust and appropriate once the technicality is addressed.

Adani is in the fifth year of development and approvals and the need to finalize these approvals and timelines is critical so Adani and the community can realize the benefits associated with its investments to date, including 10,000 jobs and $22 billion in taxes and royalties to be reinvested back into the community, the statement said.

“For the past six to 12 months, Adani has maintained a level of investment and project timelines based on anticipated approvals timelines and milestones. As a result of changes to a range of approvals over that time, it’s necessary our timelines and budget reflect those changes," the spokesperson added.

But experts are skeptical.

“On the face of it, this is clearly a major setback for Adani and its aspirations to be a major player in the power sector. The only ray of hope appears to be a correction of the ‘technical legal error’ that Adani believes will get addressed when the application is reconsidered," said Ramesh Vaidyanathan, a managing partner at law firm Advaya Legal.

“Given that this is not the first such Indian investment facing the ‘green heat’ in Australia, one wonders whether these investors accorded environmental due diligence the attention that it deserves. At some level, I dare say, things aggravated perhaps because of the Indian infrastructure developer mindset of ‘let’s deal with it as we go along’," Vaidyanathan said.

Adani rival and infrastructure conglomerate GVK Group is also seeking permissions to dig a mine in the basin, a 247,000-sq. km. expanse in north-eastern Australia.

In 2011, GVK had acquired Australian Coal Mines in Queensland with 8 billion tonne reserves for $1.26 billion and envisages an investment of $10 billion to for setting up mines, 500 km rail project and 60 million tonne per annum port project which will form one of the world’s largest integrated coal mining operations.

But not all experts are worried.

Jainco Corporate Advisors Pvt. Ltd’s managing director Navin Kumar Jain said the Australian Court’s decision reckons the concerns on environmental issues reportedly on a legal vulnerability of a “technical" nature which does not seem to be difficult to be sorted out by the Australian Federal Environment Department.

“Therefore, I don’t foresee this decision as a final decision scrapping the project altogether, since Adani is taking all suggested measures to mitigate damages to the environment and it is only a matter of time when the instant decision is changed after the court is convinced about the measures taken by Adani for mitigating the environmental issues relevant for the Court’s instant decision," Jain said.

However, Jain cautioned that this can cause serious time overruns resulting into significant cost overruns which may impact already challenged commercial viability in the scenario of falling coal prices thereby causing financial closure more arduous.

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