Indian mining companies regard Australia’s outback as an important coal source but face court battles against a powerful ‘green’ lobby before digging can begin. Chris Pritchard reports
Indian private enterprise is spearheading the biggest single scheduled development in the vast, ochre-hued Australian outback. But even before work can start, it has to surmount an expensive hurdle. The mining company Adani Mining Pty Ltd – part of India’s Adani Group – must first triumph over a court challenge from Australia’s influential environmentalist lobby.
The Queensland state government has approved necessary coal-mining leases on a slab of arid land about 160km north-east of the remote town of Clermont, state mines minister Anthony Lynham confirms. Queensland’s Labor Party premier and the state’s first female leader, Annastacia Palaszczuk, who is an outspoken supporter of the project, describes the approval as a major step forward after ‘extensive government and community scrutiny’.
Job-creation is a major policy plank of both the now centrist Labor Party (which governs Queensland but is in opposition federally) and the country’s right-of-centre Liberal-National coalition government led by Prime Minister Malcolm Turnbull. The approved Carmichael coal mine – a big facility with a dedicated rail link to a new coastal port – will, predicts Palaszczuk, create ‘thousands and thousands of jobs, 5,000 during construction and another 4,500 during the peak of operations. It means jobs for local people as well.’ And it won’t, she insists, pollute Queensland’s famed Great Barrier Reef or the state’s hinterland.
The project is forecast to boost Australian coal exports significantly, shipping 60,000 tonnes of coal to India each year. Overall, coal exports to India are expected to grow sharply during the coming decade. The world’s fourth-largest coal producer, Australia exports nearly 300 million tonnes of black coal annually to 33 countries, with Japan and China the two main markets. It is one of India’s three main coal sources, the others being Indonesia and South Africa.
Backgrounding the court battle, Australian Conservation Foundation chief executive Kelly O’Shanassy acknowledges the ACF’s aim is to prevent construction of the Carmichael coal mine. ‘We’re actually trying to stop all new coal mines being built because we need a future based on clean energy,’ she argues.
Across in Western Australia, another mineral-rich state, several Indian companies are involved in mining. Among these is New Delhi-based Lanco Infratech, which five years ago acquired Griffin Coal, operator of the existing Muja coal mine near the town of Collie. It exports thermal coal, used mainly to produce electricity. Availability of electricity is widely forecast to surge in India over the next quarter-century and demand for ‘old fuel’ (coal) will rise sharply too, notwithstanding increased use of nuclear power. Consequently, Indian companies are scrambling to source coal both as buyers and miners. In fact, several Indian companies are already involved in Australia’s important mining sector, mainly in the coal niche, though Australia is also a major producer of iron ore, gold and other minerals.
A spin-off will be more jobs for Indian mining engineers, adding to the large proportion of professionals in Australia’s growing Indian community. According to the Australian Bureau of Statistics, this ethnic group is already nearly 400,000 strong, and increasing. India has become the number-one source of immigrants in this increasingly multicultural country, whose total population is just over 23 million.
However, Australia has a serious shortage of mining engineers. Though a mining boom ended two years ago, projects already in the pipeline were largely unaffected, and most analysts forecast a new boom. They contend that the downturn, mainly due to a temporary Chinese economic slowdown, is cyclical. With new mines planned, the immigration of more Indian mining engineers is inevitable.
Self-made Indian billionaire Gautam Adani, the chairman and founder of Adani Group, has already vented his frustration at delays caused by Australian red tape, and also with the latest court challenge. He has even hinted at pulling out of Australia, though analysts regard the chances of this as slim, pointing out that it would hand too easy a victory to environmentalist opponents who would otherwise be unlikely to succeed in thwarting his plans.
‘You can’t continue just holding,’ the 54-year-old mining tycoon remarked recently at the Ahmedabad headquarters of his US$26 billion energy and infrastructure conglomerate. ‘I’ve been really disappointed that things have got too delayed.’
For the most part, Adani leaves decisions about the group’s activities Down Under to Jeyakumar Janakaraj, a mechanical engineer who is chief executive of Adani’s Australian arm. Janakaraj doesn’t conceal his irritation over ongoing delays, asserting that these damage Australia’s international reputation. ‘I think it has already turned off a lot of switches,’ he says. ‘I’m not saying it’s going to be permanent, but there has been damage.’
Adani himself is close to Narendra Modi, who in 2014 became the first Indian Prime Minister to visit Australia in three decades. Modi reportedly urged his Australian counterpart to fast-track the Adani project, and indeed the Australian Prime Minister, Malcolm Turnbull, is known to be irked by his country’s ‘green’ lobby. The Australian Greens, a minority environmentalist grouping, have nine senators and one lower-house parliamentarian in Canberra.
A light diversion from the national debate over mining and the environment came recently when arguably the country’s highest-profile Indian residents, Pankaj and Radhika Oswal, won a surprise out-of-court settlement from the Australian and New Zealand Banking Group (ANZ) of more than US$150 million. This ended a long-running dispute between the bank and the Oswals over financial matters, including the couple’s stake in a big fertiliser company.
The glamorous duo are known for flaunting their wealth, the most glaring example of which is an enormous but incomplete mansion, now abandoned, in Peppermint Grove, the smartest suburb in Perth, Western Australia’s state capital. The Indian-style ‘fantasy home’, as newspapers term it, has been widely criticised as inappropriate to its neighbourhood, and local authorities may win court permission to demolish it. The Oswals left Australia for Dubai after their court victory. They are reported to have told Australian friends they have no plans to return, and are instead considering a move to New York. There are suggestions that other court cases, including one with the tax authorities, loom in Australia.
Of far greater interest to Australia’s economic planners, however, is the less colourful topic of coal mining, particularly its environmental impact, if any, on an outback poised to service India’s ballooning demand for coal. Mineral wealth underpins Australia’s economy and standard of living. Skyrocketing exports to Japan, South Korea and China have demonstrated this. Now it’s India’s turn, and Indian mining companies, though far less common than kangaroos, are becoming an increasingly visible part of the Australian landscape.
Sydney-based Chris Pritchard has travelled widely in the Asia-Pacific area. He has visited many countries in Africa and South America, but now concentrates mainly on Asia where he follows political developments closely and is a frequent visitor. He is a former Wall Street Journal and BBC correspondent