Adani’s coal mine acquisition in Australia under scanner

Company failed to submit environmental track records to Australian environment ministry

By Soundaram Ramanathan
Published: Saturday 16 February 2013

Coal development in the Bowen Basin just east of the Galilee Basin. The area is under threat from coal mining and in particular the loss of the Bimblebox nature reserve--home to the endangered black-throated finch. Aerials show the existing coal developments contrasted with the natural beauty of the area (Courtesy ©Greenpeace/Tom Jefferson)

The Adani group, which has been in news recently for starting development work in Mundra Special Economic Zone without obtaining environment clearance, has run into trouble in Australia where it is seeking permission to mine coal. Tony Burke, Australia's environment minister, has ordered an inquiry into the coal mining operation proposed in the country by Adani Mining Pvt. Ltd.

The probe has been initiated on the basis of allegations levelled by international non-profit Greenpeace. It accused Adani of not producing environmental records of its activities in other countries, including India. These details are mandatory according to the terms of reference (ToR) for the mine in the Galilee Basin in Queensland, granted by the Australian environment ministry.
Adani Mining had earlier run into controversy in India over the allocation of coal blocks  without a proper bidding process by the government, and its proposed open cast mining project near Lohara in Maharashtra, adjacent to Tadoba Andheri Tiger Reserve.

According to Georgia Woods, Greenpeace campaigner in Australia, the environmental impact statement (EIS) that was prepared for the mine in the Galilee Basin was incomplete and inaccurate. “There were threatened species not included in the assessment, as well as inaccurate mapping and incomplete analysis. One of the items in the ToR for the mine was the “environmental record” of the proponent. We did not see evidence in the EIS that this item had been addressed, and were aware of the environmental issues and legal cases at some of Adani's Indian operations, so we included this in our submission,” she says.

Woods also alleges that if this coal mine is granted, Australia will not be able to meet its commitment to limit global warming to within 2°C above pre-industrial temperatures. Australia has binding targets to reduce its greenhouse gas emissions under the Kyoto Protocol, a binding international treaty signed by countries to contain climate change.

Adani proposed an underground coal mine and a railway line in the Galilee Basin in 2010. The proposal to mine 60 million tonnes of coal per annum was granted ToR for the EIS of the project in 2011 by the Australian ministry. The public consultations which followed came to an end last week. The mine is supposed to start production from 2022.

The proposed coal mine is going to be twice the size of the Australia‘s biggest current coal mine with an area of about 44,370 ha which is as big as the area of Dadra and Nagar Haveli. Methane emissions from all coal mining related activities – extraction, transport and storage – account for 7.4 per cent of total global anthropogenic methane emissions in 2005, reports the World Coal Association website.

Manoj Kumar Muthumanickam, project manager of RCogen Asia , a Clean Development Mechanism consulting company, says methane emission is no longer such an issue. “Of course there was an issue of methane emission from coal mining earlier, but now new technologies to trap methane in the coal fields are available. But coal mining activity alone cannot contribute to global warming on a big scale.”

The Indian and Australian offices of the Adani group of companies, as well as the Australian ministry were unavailable for comments.

Coal mining abroad

India is the world’s third largest exporter of coal, but the exploration of coal abroad by Indian companies is an increasing trend. Surya Prakash, general manager of GVK Infrastructure, which acquired the Hancock coal mine in Australia, explains why companies are keen to invest abroad. “There are large stretches of land, say 4,000 ha, available for coal mining in Australia. Though they have stringent environmental procedures to be met, there is still a clear way for corporate procedures unlike in India.”

It has not been an easy journey for companies investing in coal mines in Australia. The company Lanco fought a huge legal battle against Perdaman Industries in the Supreme Court of Australia over coal supply issues, and won the Griffin coal block of Australia in the last week of 2012.

The Indian government too is proactive in investing in coal mines abroad. The company International Coal Ventures Private Limited (ICVPL) was set up for this purpose. ICVPL is a joint venture of Steel Authority of India (SAIL), Coal India Limited (CIL), Rashtriya Ispat Nigam limited (RINL), National Mineral Development Corporation (NMDC) and National Thermal Power Corporation (NTPC).

Sudhir Chawla, deputy general manager, ICVPL acknowledges that the company has not started any coal mining operations abroad. “We are in the advanced stages of negotiations,” he explains.

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