Carmichael Coal Mine, Australia

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CO2 Emissions

Annual emissions from this proposed project are estimated to be 60m tonnes per annum. It is a pivotal project to open up the Galilee Basin that would have a combined export tonnage of 280m tonnes per annum or roughly equivalent to Indonesia’s annual coal exports. Activation of the Galilee Basin would more than double Australia’s coal exports from 300m tonnes per annum in 2010-2011 to broadly 600m tonnes per annum.

Strategic Significance

  • Potential to debunk new coal narrative that it is the energy source of choice for the world’s poor
  • Much of the coal would be exported to India, where the poor are paying 2 to 3 times the proper market rate for electricity due to Adani’s corruption
  • Assist in framing coal proponents as robber barons (potentially in combination with work in Indonesia) – the stories are very linked
  • A campaign touching on Australia, as a first world nation, reveals that corruption in not an issue reserved for developing nations or markets and that fossil fuel corruption is universal / endemic

Companies Involved

The Adani Group is working hand in glove with the Indian PM Modi. Modi travels routinely in an Adani private jet and Gautam Adani regularly attends meetings with Modi and global political leaders, including China, America and Australia. Modi is operating on an anti-corruption ticket. Adani is Modi’s biggest donor.

The Adani Group is headed by two brothers – Vinod and Gautam. Gautam is group Chairman with Vinod operating private entities within the group. Vinod has been charged by the Indian Government’s Criminal Bureau of Investigation for stealing US$1bn from Adani Enterprises. Charges have not been formally made - it is indefinitely delayed. The story has not been told in India through media self-censorship and likely ownership of the media being linked to industry.

Potential ESG Risks

Corruption

  • Tax havens: Adani companies located in Dubai as part of abusive invoicing mechanisms. Adani also operates in the tax havens of Singapore, Cayman Islands and Mauritius.
  • Anonymous companies: use of complex company structures in the Adani Group to siphon off revenues at key points in the supply chain for the supply of power generation infrastructure to the Indian market.
  • Abusive invoicing / trade mispricing: Adani uses invoicing fraud at various supply chain stages to avoid taxation and then inflate coal or capital equipment value at delivery to the Indian market to inflate electricity retail prices. This results in power costs to the ultra-poor being over twice what they should be. India’s poor are paying for Adani corruption. Adani’s importation of capital infrastructure and coal to India is alleged to involve over-invoicing of equipment from China via Dubai using shell companies. This has been investigated by the Indian Directorate of Revenue Intelligence.
  • Looting of a publicly listed company by private managers – identified in the Queensland context. Australia’s biggest coal port was handed to an overseas private company who company ownership is in doubt. Suggestion that Australian federal and Queensland state governments have both failed in their due diligence processes. Also legality issue of what corporate entity in the Adani Group actually owns the coal port as a clear corporate entity has to be the applicant seeking federal and state permits. Advice from Oz is that Adani used the purchase of the coal port to ‘launder’ US$1bn. Adani avoided Australian anti money laundering laws by selling the coal port as an asset within its corporate entities. There is a clear implication that Australian financial institutions have facilitated criminal behaviour.
  • State capture (e.g. rewriting of public tax/subsidy/water/regulatory rules for private benefit) – likely in both Australia and India. Needs more research but the Australia Institute has done much of this…
  • Bribery – hinted at in the Queensland political sphere, but no proof obtained.
  • Conflicts of Interest: Group’s ownership of the Abbot Point coal terminal on the Central Queensland coast relates to one of Australia’s largest coal terminals. Fairfax media investigations cited use of a complex web of companies – some located in Singapore and the Cayman Islands – hides the actual owner of the port. The port ultimately be owned and/or controlled by Vinod Adani who is directly implicated in large-scale corruption.

Organizational Allies

International: Earthjustice, Sierra Club, International Coal Network, RBF, RFF, SeaChange, European Climate Foundation, GP, IEEFA.

Local Opposition

Local: Sunrise, Indian CSO launching legal action against the mine under Australian law (facilitated by Earthjustice – confidential), range of Australian NGOs and very close connections to state, federal and international lawyers.

Indigenous: Wangan and Jagalingou People – applicants under Australian Native Title Act.

Project Status

In August 2018 Australian court quashed an indigenous group’s bid to block Indian resource conglomerate Adani Enterprises Ltd from developing its controversial Carmichael coalmine on Friday, clearing one of the final legal hurdles to its development.an [1]

Infrastructure

Domestic Political Situation

Project Economics

International Dynamics

The nexus of corruption issues connecting Indian and Australian political and fossil fuel players creates fertile ground for an expose and follow-up campaign.

Financing

In July 2018 Adani announced that it is still seeking financing to build the rail line that will connect to the mine. Some analysts note that billionaire Adani has the ability to fund the project himself, if other financing is unavailable.[2]