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The Abbot Point gamble
On the doorstep of the Great Barrier Reef, Abbot Point is set to
become one of the world’s biggest coal ports. However the
yet-to-be-developed coal mines it's supposed to service look
increasingly unviable and the environmental risks are enormous. Jess Hill investigates.
Australia has never seen anything like what’s being planned in the Galilee Basin.
One
mine alone, the Carmichael mine, is 40 kilometres long, and will
produce 60 million tonnes of coal per year. That's twice the size of
Australia's biggest coal mine.
If they were to dredge that material, and dump it out onto the
Reef, it's only going to make the situation worse. If that material was
dumped on land it would be classed as a regulated waste dump and you
wouldn't be able to do anything with it.
John Broomhead, former John Holland employee
kilometres inland, and there's virtually nothing there. The Indian
companies racing to mine it, Adani and GVK Hancock, will have to build
almost everything from scratch: a new airport, new roads, new power and
water infrastructure, and 300 kilometres of rail. They'll also have to
build the world's largest coal port. That's what they're doing at Abbot
Point, on the shores of the Great Barrier Reef World Heritage Area.
Adani
and GVK, which are both carrying billions of dollars in debt, have
little to no experience in coal mining. But when they bought into the
Galilee, back in the heady days of the boom, everything seemed possible.
Prices were sky high, and everybody thought the good times were here to
stay.
But in 2012, the coal price crashed, and it hasn't
recovered. 'A lot of assumptions that the industry made about thermal
coal five years ago are no longer true,' says Goldman Sachs analyst,
Christian Lelong. 'The years of very high demand growth for thermal coal
are probably gone for a long time.'
That's why many of the
world's leading investment banks are saying the Galilee Basin mines
simply aren't viable anymore. One of them is UBS, whose commodities
analyst Daniel Morgan says that for the Galilee Basin to be profitable,
the coal price would have to be around AU$110 per tonne. 'Our long-term
estimates for thermal coal prices are US$80 per tonne,' he says, 'so
even on our long-term prices it doesn't look like a compelling project
to us.'
Excerpt from the Article by the ABC
ABC
Sunday 8am, as part of Sunday Extra
Repeated: Tuesday 2pm
Repeated: Tuesday 2pm
Presented by Jonathan Green
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