Indian mining groups – Adani and GVK-Hancock – have not waivered to drop their stakes in the controversial Abbot Point Port terminals in Northern Queensland.
The rest had already dropped the deal, including BHP Billiton and Rio Tinto. Anglo American is the latest to announce it is walking away.
Abbot Point in Northern Queensland (Photo: NQBPC)
BHP Billiton has formally withdrawn from the $5 billion worth of project as the preferred developer of Terminal 2 in 2012. It also pulled out of building a rail line linking the port with Bowen Basin mines.
Early on, doubt has been cast over the feasibility of the project.
The recent decision by Anglo American re-affirms the unfeasibility of the project. The firm announced that oversupply of coal in the world market has dampen prices.
As of its December 2013 financial records, “metallurgical coal saw underlying operating profit fall 89% to $46m, while thermal coal profits fell 32% to $541m as a result of lower realised prices.”
Bloomberg’s writer, Elisabeth Berhmann, quoted a Sydney-based commodity analyst from Goldman Sachs Groups Inc as saying, “For these projects to be attractive investments, you need to be quite bullish about thermal coal prices….If you’re a power company, and you’re wanting to secure sources of coal, there’s plenty of coal in the market.”
Mining Australia notes the expansion would see four terminals costing $6.2 billion which would provide an extra annual capacity of 120 million tonnes. this would also support the development of mines in the Bowen, Surat, and Galilee Basins.
Adani and GVK Hancock, however, are all out to develop Terminal 0 and Terminal 3, respectively.
Josh Euler, manager for corporate affairs at GVK Hancock, welcomes the decision to go ahead with the expansion. He said in a press statement , “This is a significant milestone in developing our Galilee Basin coal projects, which represent the creation of over 20,000 direct and indirect jobs and over $40 billion in taxes and royalties.” .
Amid bearish coal market prices, environmental groups have denounced the Government’s decision due to its high risk posing an irreversible damage to the world heritage site. The Great Barrier Reef Marine Park Authority (GBRMPA) approved the dumping of 3 million cubic metres of dredge spoil in the reef marine park
The Australian public has been outraged with the approval. Last year, the United Nations downgraded the world heritage site into the endangered list.
Protesters in mascots against dumping on the reef. (Photo: AAP)
GBRMPA expedited a crisis communication in an attempt to ‘enlighten’ and ‘pacify’ the public.. Its chairman, Russell Reichelt, has written an article at the academic online paper –The Conversation – to justify the approval. He said the decision is based on comprehensive study and sound judgment that will not do any lasting harm to the heritage site. Discussion has been open to the public since March 3. Reichelt answers the queries himself although readers– composed of engineers, scientists, researchers, and ordinary citizens — are neither convinced nor impressed with the attempt to “gloss over” the real issue.
Observers said, there is something fishy at the sudden turn around of decision considering the warnings over sediments dumping.
Greenpeace also found a document that questions the integrity of the decision. It shows that GBRMPA feared the dumping would annihilate the barrier reef. However, the Environment Department ignored the warnings and pressured the marine park authority.
Greenpeace campaign poster against Adani group
Indian firms- the culprit
Association of Marine Park Tour Operators President Colin McKenzie, the peak industry lobby group covering tourism in the World Heritage-listed reef region, accused the marine park authority of pandering to politicians and for allowing Adani group to undertake a risky business.
“The biggest culprit is Adani, an Indian corporation that wants to build Australia’s biggest coal mine in the Galilee Basin in central Queensland, and needs the dredging to allow huge coal ships to access their proposed new coal terminal at Abbot Point to send their coal overseas,” Greenpeace said.
Related story HERE