Tap tightens for Adani
Wednesday 14 September 2016
A decision by the State Government to introduce new legislation this month requiring miners like Adani to enter into a new approvals process for using groundwater will inevitably mean substantial delays to any possible start to the project.
While the legislation still has to be passed by the existing hung parliament - which is not easy - it would if implemented effectively require large mining projects to go through a brand new approvals process to get a water licence, crushing Adani’s stated goal of construction next year.
In the current system - the issue of water is dealt with under the overarching requirements of the State and Federal Government environmental approvals process - which Adani has now completed successfully.
An Adani spokesman says they are looking at the proposed “transitional arrangements to fully consider their impacts”.
While environmental objections lodged by green groups and funded by taxpayers have received a lot of publicity for their ability to delay the likes of Adani - water and economics have always been the major obstacles for the Galilee.
Given the mega dimension of the proposed mines, it’s not surprising that their water requirements are also prodigious.
However when interest in the Galilee got going in the boom years - water didn’t seem like a big problem because of the proposed Connors River Dam project that would have piped water in an arc from the Connors River Dam to Moranbah and onto the Galilee Basin at the cost of around $1.5 billion.
However, that project was canned midway through 2012 with the government saying there was not enough interest from end users.
That decision led to significant developments in the Emerald irrigation area when mining magnate Gina Rinehart began entering into “option” deals with irrigators giving her the ability to buy their water at some future date if required for her Galilee mines.
In the interim, irrigators could continue to use the water while enjoying a deposit, plus interest payments on the total remaining value of that water. It is unknown what the total investment in water was - but one farmer claimed to have a three-year arrangement worth around $11 million.
However, by 2014 GVK Hancock had abandoned the options saying they had found other solutions.
“In the past, we secured allocations of excess water supply in the region, but through ongoing planning refinement we have significantly reduced the amount of water we will require,” they told Shift Miner at the time
“So it makes no business sense in continuing to pay holding costs for water supply allocations for which we have no use, and are continuing with licensing for the allocation that we require.”
While piping water from Emerald to the Southern Galilee Basin might be viable for GVK Hancock, it is not a viable option for Adani whose Carmichael project is far further to the north, meaning their only options for water are from the Belyando River system or groundwater.
Revisiting these plans and seeking new approvals could be the straw that breaks the Camel's back for Adani.
Adani has undergone six years of federal and state approvals and legal challenges over their rail, port and mine project. Earlier this year, owner Gautam Adani warned that he might abandon the project if there were more unforeseen delays.
“You can’t continue just holding … I have been really disappointed that things have got too delayed,’’ he told The Australian.
The new laws if passed will also apply to the $900 million expansion of New Hope’s Acland coal mine, and Rio Tinto’s $1.9 Billion Amrun Bauxite project in far north Queensland.
- Moranbah, Galilee big winners Wednesday 15 March 2017
- 1000 jobs and no railway required? Wednesday 01 March 2017
- Senators to decide Adani Wednesday 22 February 2017
- Key port upgrade Wednesday 15 February 2017
- Rio sells out of coal Wednesday 25 January 2017
- Adani Carmichael v Coal & Allied Wednesday 25 January 2017
- 2017 at a glance - Thermal Coal Wednesday 11 January 2017
- Mixed signals for Adani Wednesday 21 December 2016
- Big news in small print Wednesday 07 December 2016
- The Adani timeline Wednesday 12 October 2016