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Great Barrier Reef Pitted Against Coal Jobs in Australia Vote

Bloomberg

The fate of Adani Group’s A$16.5 billion ($12.4 billion) Australian coal mine hinges on weekend elections in Queensland state, as voters weigh the promise of new jobs against a potential environmental threat to the Great Barrier Reef.

The Labor government has vowed to reject A$900 million in federal funding for a new rail link, which is needed to carry coal to the coast for export. The opposition Liberal National Party, vying to win office in Saturday’s ballot, says that threatens the viability of Indian billionaire Gautam Adani’s project, and with it the economic future of the resource-rich state.

As the world grapples with the fossil fuel’s role in the future energy mix, the proposed Carmichael mine has become a defining issue in the election. Opinion polls indicate the result is too close to call.

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“This is the biggest specific issue in the election and the way voters perceive the mine will swing a lot of votes,” said John Quiggin, an economics lecturer at the University of Queensland. State Premier Annastacia Palaszczuk’s vow to block funding means Labor is “now seen in the anti-Adani camp,” he said.

Supporters say the mine will open up the Galilee Basin, a coal-rich region bigger than the U.K., and create thousands of new jobs in the struggling state. Queensland, hit hard by the end of a decade-long mining-investment boom, has the nation’s second-highest unemployment rate.

Opponents say Australia’s largest coal project would increase carbon pollution, exacerbating coral bleaching that’s already damaged large swathes of the world-famous reef.

Adani has repeatedly rejected concerns that the project or cargo vessels carrying coal exports to its Indian customers could damage the world’s largest living structure.

“The mine is 400 kilometers inland from the reef,” Ron Watson, a Brisbane-based spokesman for Adani Australia, said by email. “There has not been one incident in the Great Barrier Reef Marine Park in 50 years. The only threat to the reef is those who throw around wild accusations.”

Watson declined to comment specifically on the federal funding issue or the state elections and said Adani continues “to target first production in 2020.”

Palaszczuk, 48, is seeking to win a second term for her center-left Labor party, which has been in minority government after elections in January 2015. She says she vetoed federal funding for the rail link earlier this month to diffuse potential claims of a conflict of interest, as her partner is employed by a financial adviser to Adani.

The premier says she supports the mine, but doesn’t “think taxpayer dollars should be going toward a billionaire to build a railway line.”


Liberal National state leader Tim Nicholls, 52, seized on the veto, saying Palaszczuk had “put thousands of jobs at risk with this extraordinary backflip.”

The election may go to the wire. A Sky News/ReachTel poll of Queensland voters released Tuesday had Labor leading the Liberal National Party 51 percent to 49 percent. If neither side wins a majority, Nicholls hasn’t ruled out forming a coalition government with anti-Muslim immigration party One Nation, which supports the project but not the federal loan and wants the rail line to be state-owned.

Securing the loan is pivotal for the Carmichael project as it could ease the way for other lenders, including Chinese banks, said David Lennox, a Sydney-based resources analyst with Fat Prophets.

“If they had to carry that financing themselves, that would add to the mounting pricing pressure on this project,” Lennox said. “If they can’t build the rail, you’re going to have a lot of coal sitting in the middle of nowhere.”

An announcement that Chinese state-owned enterprises, banks and export credit agencies will back the venture may be made in coming weeks, the Australian Broadcasting Corp. reported Wednesday, citing an unidentified Adani executive.


The future of coal is a vexed issue in Australia, which generates three-quarters of its electricity from the fuel. At climate talks in Germany last week, 19 nations agreed to quickly phase out its use. Australia refused, with Prime Minister Malcolm Turnbull continuing to back an industry that last year reaped A$42.3 billion in exports, second only to iron ore.

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Galilee Basin

Should it proceed, Carmichael will produce 60 million tons a year from six open-cut pits and as many as five underground mines over its 60-year life. It could also unlock the Galilee Basin’s 247,000 square kilometers of resources, with the Clive Palmer-owned Waratah Coal Ltd. and GVK Hancock — a venture between Indian conglomerate GVK and the Gina Rinehart-owned Hancock Prospecting Pty — also proposing projects.

Just how many jobs the Carmichael mine would create is disputed. In television commercials aired during the last state election, Adani put the number at 10,000 direct and indirect roles. The state government estimates 2,475 people would be employed building the mine and rail link, and 3,920 operating them.

For Nicole Rosser, a 30-year-old marine biologist who co-owns a dive tour business in the Whitsunday Islands, no amount of jobs could justify the threat to the reef. The complex ecosystem, which is under siege from climate change, agricultural runoff, coastal development and illegal fishing, contributes an estimated A$6.4 billion to the economy a year, according to Deloitte Access Economics.

“The mine has the potential to destroy the reef,” Rosser said. “It doesn’t make financial sense, it doesn’t make environmental sense.”