Indian groups keep stake in Abbot Point, reef dumping

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BHP Billiton has formally withdrawn from the $5 billion worth of project as the preferred developer of Terminal 2  in 2012.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.” .

Double disadvantage

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

Furious tour operators and Greenpeace are pointing fingers at the Indian mining tycoons as the culprit of an impending catastrophic disaster awaiting the vast expanse of corals.

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.

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Mining giants snub Cape York’s world heritage value

As the Federal Government released the report qualifying Cape York for UN World Heritage listing, the Queensland state government launched its political rhetoric to encourage local indigenous communities to support mining and to oppose the planned world heritage nomination. Cape York is a peninsula located at the northern tip of Queensland.

Deputy Premier Jeff Seeney promised indigenous people a stake in the estimated $25 billion worth of bauxite deposits near Watson River in Aurukun, north of Cairns. He also announced that five mining companies have been shortlisted to undertake the project. Queensland is optimistic mining would transform “welfare-dependent communities” into a “booming town.” Indigenous owners will have equity and the venture will create jobs, Seeney said.

The five mining giants are Rio Tinto, Cape Alumina, Glencore International (GLEN), and Aluminum Corp. of China Ltd (CHALCO). Seeney also announced the Australian Indigenous Resources (AIR), a new venture company to take part of the project.

The Australian media speculate that AIR, represented by indigenous leader Gerhardt Pearson and aluminium smelter entrepreneur John Benson, started negotiating on the stake to develop the mine. AIR demands that traditional owners would hold equity, not just royalties. It is also reported that AIR offered the Wik people 40 percent equity and another 10 percent proposed for Cape York organsations.

The processes of bauxite illustrated. (Photo: Queensland Bauxite)

Seeney said Queensland welcomes the prospect of providing an opportunity for local indigenous people to own stake “in the operation of whatever mine is able to be developed there.” Aurukun Mayor Derek Walpo also supports the project hoping Aurukun would be the first community on Cape York to be “liberated from welfare.”

Environment Minister Tony Burke supports Cape York’s enlistment, but Seeney dismissed the federal government’s plan.

In time of the Queensland announcement, however, the Wilderness Society urge the Julia Gillard Government to nominate Cape York for world heritage listing by July with traditional owners’ consent.

The commonwealth government commissioned top scientists to assess the natural values of Cape York against World Heritage criteria. They released the report recently and found that the peninsula contains universal values of international significance and that these values are widespread all over the place.

The values are divided into seven key attributes, including tropical savanna, rainforest, bauxite ecosystems, freshwater biodiversity and dune systems– some of these are the best examples of ecosystems on the planet.

The bad news: mining and land clearing are identified as threats to its enduring values.

Wilderness Society Northern Australia Campaigner Gavan McFadzean said, “This report sends a clear message to the Queensland government not to approve and fast track destructive mining developments over areas now known to be of international conservation significance.”

Earlier, Jacaranda Resources owned by Gina Rinehart applied for a licence to mine the rock art area near the Laura Basin. Rinehart, however, backed down following pressure from conservation groups.

The Quinkan rock art galleries include works of more than 30,000 years old and are some of the most significant on earth. Embedded in the spectacular Laura escarpments, the Wilderness Society said they should be one of the highlights of a future Cape York World Heritage Area.

The Quinkan rock art is listed by UNESCO as one of the top-10 rock art sites in the world. It predates the well-known sites of Lascaux in France and Altamira in Spain by up to 15,000 years. The sites are listed on the Queensland Aboriginal Cultural Heritage Database and were listed on the National Estate Register (the forerunner to the National Heritage list), which described the Quinkan rock art as constituting “some of the largest bodies of prehistoric art in the world. The paintings are generally large and well preserved, and engravings of great antiquity occur. The Quinkan art is outstanding both in variety, quantity and quality.” They have never been transferred to the National Heritage list, even though they have long been recognised as having World Heritage values.

The Laura Basin is one of Queensland’s big coal deposits and there is interest in mining for other minerals in the region.

If the enlistment pushes through, Cape York will join the ranks of Australia’s UN World Heritage Sites which include: Great Barrier Reef, Kakadu National Park, Willandra Lakes Region, Lord Howe Island Group, Tasmanian Wilderness, Gondwana Rainforests of Australia1, Uluru-Kata Tjuta National Park2, Wet Tropics of Queensland, Shark Bay, Western Australia, Fraser Island, Australian Fossil Mammal Sites (Riversleigh / Naracoorte), Heard and McDonald Islands, Macquarie Island, Greater Blue Mountains Area, Purnululu National Park, Royal Exhibition Building and Carlton Gardens, Sydney Opera House, Australian Convict Sites, Ningaloo Coast

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After carbon tax, coal to power the economy

Following economists’ recent prediction of the impending end of mining boom cycle, the Federal Government is scrambling to find an alternative solution to power the Australian economy and is now turning to seam gas and brown coal projects.

New South Wales and Victoria received the green lights to go ahead with the projects, respectively – stirring rounds of uproar from local industries, farmers, consumers, and environmental groups.

Hunter Valley in NSW is home to one of the world’s finest wineries and is now under seam gas exploration threat.

In January this year, the Federal Government created the Independent Expert Scientific Committee to provide impartial advice on the environmental effects of coal mining and coal seam gas projects. But ABC’s Lateline revealed that four out of the six members have financial links with the mining industry.

  • Professor Chris Moran – director of the Sustainable Minerals Institute at the University of Queensland. In 2010 the institute received $17 million, more than half of its funding, from coal seam gas and mining giants Santos, BHP Billiton, BG Group, Rio Tinto and many more.
  • Associate Professor David Laurence – head of the University of NSW Centre for Sustainable Mining Practices. It’s funded with a $1.1 million grant by Mitsubishi Development, a Japanese-controlled coal miner with significant investments in Queensland.
  • Professor John Langford – shareholder in coal seam gas and coal companies for his self-managed superannuation funds.
  • Professor Peter Flood –  a regular consultant for the resource industry.

Affected by the coal, the Hunter Thoroughbred Breeders Association represents stallion farms, broodmare farms, the largest equine hospital in the Southern Hemisphere.

The committee is chaired by Professor Craig Simmons who said the committee is made up of distinguished academics with long and credible public records. He rejected any suggestion that the committee’s work is influenced by industry.

Professor Gary Willgoose, a hydrologist who holds a prestigious position of Australian professorial fellow said it is virtually impossible to find an independent expert as the coal seam gas industry funds and provides the vast majority of research and consultancy work.

Larissa Walters, Federal Green Senator, however said, “These people have been appointed to scrutinise the impacts of coal seam gas and coal mining. You want to make sure that they’re not getting paid by the industry and therefore might turn a blind eye to some of the more dastardly impacts of the industry.” Read ABC TRANSCRIPT.

In Victoria, the brown coal investment is in full swing under the Ted Baillieu Government. The federal and Victorian governments today announced the creation of a $90 million fund for new brown coal projects in the Latrobe Valley.

North brown coal power station in Gippsland, Victoria. (Photo: Aaron Francis/The Australian)

The Sydney Morning Herald said each government will contribute $45 million to pay for the development and rollout of brown coal technologies, including drying for export, conversion into fuels and fertilisers, and reducing emissions from coal-fired electricity generation. The announcement comes ahead of the Victorian Government opening its controversial tender for new allocations of brown coal in the Latrobe Valley.

Federal Energy Minister Martin Ferguson said the program will create jobs in the LaTrobe Valley region, spur economic growth, and create a sustainable source of energy for Victorian industries and households.

The Minister also said,

There is a potential for brown coal to develop into a valuable export, which would not be possible without the technological innovation that may also assist in meeting the Government’s emissions reductions targets of five per cent fewer emissions than 2000 levels by 2020.”

Victorian Energy Minister Michael O’Brien said,

Our brown coal resource has for a long time benefited all Victorians, delivering a reliable and affordable power source that has underpinned our economic growth and been a competitive advantage for the state.

There is a long term viable future for the Latrobe Valley based on the sustainable use of brown coal.’

Expressions of interests for grants will close on November 19. The governments said construction of the  first funded project will be scheduled for 2013-14.

Meanwhile, Friends of the Earth campaign coordinator Cam Walker released a media statement to express his group’s disappointment over the government’s sneaky plan of scrapping clean energy projects.

The Yallourn brown coal power station in Victoria’s Latrobe Valley. (Photo: News Limited)

Last week, the Federal Energy Minister announced it will cancel the $100 grant to the proposed HRL coal-fired power plant in the Latrobe Valley. He said the announcement is devastating for the Victorian communities. The $45 million Victorian government contribution could be use to invest in clean energy technology. Walker said the announcement is a massive lost opportunity.

Instead of continuing to peddle the notion of ‘clean’ coal technologies, the government should be putting public funds into job rich renewable technology. The state government has shut off much of the state to wind energy, and refuses to listen to community concerns about coal and CSG. Having done a U Turn on climate action, it seems the government of Ted Baillieu is determined to take Victoria back into the 1950s by continuing to support the expansion of the obsolete brown coal industry.

Mining boom over, Rio Tinto announces job cuts

Barely two weeks after Deliotte Access Economics predicted the end of the mining boom by 2014 or so, Rio Tinto announced its massive job cuts in its Sydney and Melbourne offices Tuesday.

Sky News reported the Sydney office with 30 employees will shut down, while about 240 administrative staff in Melbourne will go.  Of the estimated 200 workers at the technology and innovation research centre in the Melbourne suburb of Bundoora, not a significant number will be affected. Some roles will also be relocated to operating division hubs in Perth and Brisbane.

Rio Tinto Chief Executive Tom Albanese notified employees on cuts in jobs and services around the globe (Photo: Reuters)

Job cuts is the way to deal with falling commodity prices and soaring costs, a spokesperson said.

The warning came in June when Rio Tinto chief executive Tom Albanese and Australian boss David Peever emailed their staff about plans to cut support and service costs by 10 per cent around the globe. They said they are building resilience and controlling costs during a difficult time, which includes commodity price falls and Europe’s debt crisis.

“This includes a program of reductions in service and support costs across the organisation, which have been rising sharply in recent times….Miners are complaining about rising input costs, leading in to this month’s earnings season, including wages, equipment, energy and new taxes.”

Rio’s first half net profit is tipped to fall to about $US4.9 billion ($A4.69 billion) from $US7.78 billion ($A7.44 billion) last year.

Another mining giant, BHP Billiton, is also experiencing the pinch. Its earnings have been also forecast to drop, similar with the world’s biggest iron ore miner, Vale, which posted lower than expected second quarter earnings at two year lows in the recent weeks.

Deloitte Access Economics issued the sternest warning of troubled times ahead for the mining sector. It said the boom will end in two years or so.

Argyle Diamond Mine in Western Australia (AFP: Emmanuel Dunand)

Access’s Chris Richardson admitted the boom significantly boosted Australia’s economic growth, “but the peak of the project pipeline is already in sight.”

Investment in resources projects – the key driver of the boom – is looking “less certain the further out you look”, Richardson said.

Access, Australia’s leading private-sector economics advisory said, “Mining companies are making it clear the current spike in investment is due to decisions taken a while back, whereas we are getting few new mining mega-projects across the line.”

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