With the Federal Court declaring the approval of $16 billion coal mine in Central Queensland as “invalid”, there are speculations that Gautam Adani led Indian conglomerate may decide to walk away from the controversial project. According to the media reports, approval was set aside by the court after it was found Federal Environment Minister Greg Hunt had not properly considered advice about the yakka skink and the ornamental snake.
Tony Abbott led Federal Government had approved the mega open cut and underground coal mine in Queensland’s vast Galilee Basic region in July 2014.
From the very beginning, the project has been dogged by a number of controversies. Various environment groups and indigenous people have been opposing what is projected to the biggest ever Australian coal mine project. While the Federal Court has ruled in favour of an environment protection group, the challenge mounted by the indigenous Australians is yet to get a hearing.
The Mackay Conservation Group had launched a challenge to the mine project earlier this year over the vulnerable species like the yakka skink and the ornamental snake.
To make the matters worse for the well-connected Indian conglomerate, Australia’s Commonwealth Bank has withdrawn financial support for the mega Galilee Basin coal mining project.
The depressed coal prices may also play a significant role in Adanis abandoning or mothballing their plans to export Australian coal to energy-starved India.
It looks like the Adani Group has already made up its mind to look somewhere else for the fuel to power its energy plants. A strong hint came few months back when it was announced that the Indian conglomerate had “frozen” the project ¬because of uncertainty over various court challenges and Queensland state government delays, is understood to be considering scuttling the mine.
Another strong message that Adanis are bailing out from loss-making venture came when a spokeperson of the Indian group denied that the largest Australian bank had withdrawn because of the Greens’ lobbying. On the contrary, it is being claimed, Adani had ended the relationship with Commonwealth Bank of Australia.
“Adani terminated the mandate on the basis of its own concerns over ongoing delays to a now five-year-long approvals process here in Australia,’’Australian media outlets have quoted Adani spokesperson as saying.
The “concerns” mentioned in the quote are understandable as the Gautam Adani led group has already sunk about A$3 billion on the project. This investment includes the buying of the Abbot Point port.
Commonwealth Bank of Australia has become the latest to disassociate itself from the $16.5 billion project. Eleven major international lenders (including three major French investment banks - BNP Paribas, Credit Agricole and Societe General) have already announced their reluctance to back the Carmichael project restricting Adani’s ambitions even further.
The fact that Gautam Adani is already looking elsewhere to expand his business empire become obvious from some of his recent multi-billion dollar business negotiations. Among others, the Gujarati business magnate is believed to have agreed in principle to invest $US5 billion on a Rajasthan solar energy project; $US4 billion to build India's largest solar module manufacturing facility and another $US4 billion on a greenfield methanol project in his friend Indian Prime Minister Narendra Modi’s home state Gujarat. Gautam Adani is also reported to have made acquisition of a large coal project in India.
According to the latest news reports, Gautam Adani’s flagship firm Adani Enterprise is planning a joint venture with Taiwanese major Foxconn to make iPhones in India. This project is reported to be worth US$5 billion.
Coming back to the legal setback in Australia, a challenge to the Federal Court decision is highly unlikely as both Adani Group and the Federal Government ‘consented’ the decision i.e. they agreed that the ruling was correct. The ruling was taken at the request of "all of the parties to the court proceedings".
Instead of being embarrassed for getting its approval being labelled as “invalid”, the Liberal Government representatives are putting up a brave face.
"What the department said is 'look, we have a sense that the court might find something new as a new standard and so it might be better to remake the decision'," Federal Environment Minister Greg Hunt told reporters Wednesday.
While the environment protection groups are feeling buoyed by the Federal Court decision, the so-called coal lobbyists are not amused over the delay in the mega project owned by Adani Group.
“Legal loopholes are paving the way for anti-coal activists to delay billions of dollars in investment and thousands of jobs in Queensland.
If the social media is to be considered a standard, majority of Australians would have to be labelled “anti-coal” as Twitter, Facebook and newspaper comments sections have been plastered with 100s (if not thousands) of messages praising the Court ruling.
“Coal, coal, go away, get the message, it's a great green day” reads one of the comments on a Fairfax news story.