Why Adani's planned Carmichael coalmine matters to Australia – and the world

Adani’s proposed Carmichael coalmine in Queensland would be the largest Australia has ever seen and the federal and state governments are keen to offer it financial support.

What will the extent of the project be?

Adani has said that over a 60-year lifetime, the company expects to extract 2.3bn tonnes of coal, which would make it equivalent to the biggest mine in the US.

It is proposed to have six open-cut pits as well as five underground mines, with a disturbance area more than 30km long.

The company initially obtained approval to remove 60m tonnes of coal each year, but has scaled back its ambition to an initial production rate of 25m tonnes a year.

But building the mine would have a much wider indirect effect. Carmichael would be the first mine in the giant untapped Galilee coal basin. The infrastructure that would be built to allow extraction of coal from the Carmichael mine could serve at least 10 more. If all the mines mooted for the basin were built and reached their proposed maximum output at the same time, they would be producing 330m tonnes of coal a year – more than Australia’s entire coal industry does now.

Industry consultant Wood Mackenzie has estimated that about half that might actually be extracted in any one year.

The government’s Northern Australia Infrastructure Fund is considering an A$900m subsidised loan and Matt Canavan, who was responsible for that fund until stepping aside as resources minister last month, has repeatedly stated his strong support for the project.

The Queensland state government has made a deal with Adani, offering it a break on its royalty payments for the coal it extracts – but the details are secret.

Why are people so opposed to it?

A wide range of groups are opposed to the project for different reasons.

Climate: If the mine does extract all the coal Adani says it plans to, the average emissions from burning that coal will amount to about 77m tonnes of CO2 each year.

And if the mine reaches its touted peak production rate of 60m tonnes a year, it will be responsible for more than 120m tonnes of CO2 emissions in those years – more than the annual emissions of many countries.

If the mine goes ahead and that leads to the development of other mines in the basin, their potential combined maximum output would result in more than 705m tonnes of CO2 being emitted each year. That’s about 1.3 times Australia’s total current emissions. If even half that were produced it would result in emissions larger than those of most nations.

If the world wants to have a 50% chance of keeping global warming at less than 2C above pre-industrial levels, 88% of the world’s known coal reserves need to stay in the ground. In the Asia-Pacific region, more than 90% of coal needs to stay in the ground, according to research published in Nature.

Coal burned in other countries is not counted in Australia’s emissions – coal from Carmichael would be exported to India – but many scientists and commentators have pointed out that producing those emissions runs counter to Australia’s commitment in the Paris climate agreement to work to keep global warming at “well below” 2C.

Water: Among the most pressing environmental concerns with the Carmichael mine, aside from climate change, is its reliance on water, a precious resource in Australia. Coal mining uses a lot of water for everything from cooling cutting equipment in underground mines through to transporting coal as a slurry in pipelines. About 250 litres of freshwater is used for each tonne of coal produced.

In April the Queensland government granted Adani a highly unusual water licence to extract unlimited amounts from a water body that feeds into the underground Great Artesian Basin.

Adani itself has estimated it will use 12bn litres of water a year – or 13 Olympic swimming pools a day. The licence acknowledges this will “have an impact on the underground water levels in the region of the mine” both during and after the mine’s planned years of operation.

As that water level drops, farmers’ bores could run dry and unique ecological communities in the region that rely on the natural springs may be destroyed. Environmentalists and farmers have complained that there are no “trigger thresholds” that will force mining to stop if Carmichael uses too much water.

Impacts on the Great Barrier Reef: Environmental groups have worked hard to link the development of the Carmichael mine to the destruction of the reef. Over the past two years, half the coral on the reef has been killed in bleaching events caused by rising water temperatures, mostly a result of climate change.

Scientists have said that for coral reefs to have any chance of a future, global warming must be stopped at 1.5C. Even if that could be achieved, coral reefs would be severely degraded.

So to the extent that coal from the mine contributes to global warming, it is a threat to the reef. But the mine will also have a more direct impact, since the coal will be exported to India via a shipping terminal on the Queensland coast at Abbot Point, opposite the reef, increasing the risks of collisions, spills and excessive coal dust harming corals.

The terminal will be expanded to accommodate coal from the Carmichael mine, which will involve dredging. This is notoriously problematic for surrounding coral, since it stirs up sediment, which degrades water quality and starves coral of sunlight.

Adani’s reputation: A report by Environmental Justice Australia detailed a long list of allegations of environmental damage caused by Adani Enterprises and its subsidiaries around the world. And a more recent report by the same group detailed evidence in support of allegations of illegal business dealings, which EJA says points to involvement in large-scale illegal mineral exports and violations of Indian environmental laws that harmed the environment and communities.

What is the support for the mine based on?

The most common reason given by Australian politicians for supporting the Carmichael mine is jobs – but other arguments are raised in support of it too.

Jobs: Queensland’s unemployment rate is at 6.4%, and higher in some regional areas. So 10,000 jobs, as Adani, Australian prime minister Malcolm Turnbull and others have said the project will provide, are a strong motivation to support the project.

But that “10,000 jobs” figure is pulled from Adani’s publicity material, and is contradicted by testimony in a Queensland court, given by consultants for Adani. Jerome Fahrer from ACIL Allen Consulting submitted an analysis on behalf of Adani estimating the project would create just 1,464 jobs.

And that figure is an estimate over the lifetime of the project, assuming it reaches maximum capacity, extracting 60m tonnes of coal a year.

But according to Wood Mackenzie, the jobs in Queensland would come at the expense of mining jobs elsewhere. In a report for the Infrastructure Fund, which has coal investments in the neighbouring state of New South Wales, it found coal-producing basins in NSW and southern Queensland would cut their production by more than a third, due to a drop in coal prices, if Carmichael opened. It also found 10 new projects that would otherwise go ahead in NSW would no longer be profitable.

Alleviating poverty: Australian ministers have argued that coal from Adani’s Carmichael mine will help lift people in India out of poverty, since it will be used to generate electricity in a country where many people have no access to power.

Australia’s minister for the environment and energy, Josh Frydenberg, has said the mine will help “lift hundreds of millions of people out of energy poverty, not just in India but right across the world”.

It is true that about 75m rural households and 6m urban households in India have no power. But burning more coal won’t help the vast majority of those people, since they don’t have a connection to the electricity grid.

Access to the grid is too expensive for most of those people, making off-grid renewable generation a much more realistic option for alleviating energy poverty. The Indian government is aware of this, with plans to stop importing coal altogether. And its energy policies have been driving the cost of solar to record lows.