This map gives some idea of the geographic positioning of the vast Galilee Basin, one of the greatest untapped coal reserves in the world.
This map locates it in relation to some well-known towns.
Last year we were told that nine coal mines are proposed. The Alpha proposal and Kevin’s Corner (GVK and Hancock Coal) could each produce 30 million tonnes per annum for export, Palmer’s China First hopes for 40 million tonnes. The Carmichael deposit (Adani) at 10 billion tonnes is the world’s largest coal deposit. I think the plan there is for another 30 million tonne mine.
Greame Readfearn has calculated that the Alpha and Kevin’s corner projects alone will produce 3.7 billion tonnes of CO2-e when burned. He compares that to the UK which emitted 571.6 Mt of CO2-e last year. He also outlines some of the difficulties being encountered, including contestation in the land Court.
Greenpeace calculated that if the Alpha coal project was a country, its annual emissions would be higher than the likes of Austria, Columbia and Qatar.
Last week Lateline highlighted the problems encountered by Adani, mainly high debt. A report by the Institute for Energy Economics and Financial Analysis commissioned by Greenpeace found the project “uncommercial” and found that Adani Power was losing money on its other operations.
Climate Spectator reports that the problems extend to the entire basin. Report co-author Tim Buckley:
“Our analysis shows a systemic problem with the financial viability of coal mining in the Galilee Basin. Adani may have thought they were buying a coal mine, but it is increasingly likely that they have inadvertently bought themselves the world’s most expensive cattle station.”
Matthew Stevens at the AFR says that the coal destined for India (GVK and Adani) will be mined, sooner or later, one way or the other. The reason is that power stations are being built in India to use the coal.
Strevens also goes into research by CLSA on the $2.5 billion Wiggins Island Coal Extraction Terminal (WICET), also mentioned in other links above. Climate Spectator cites a report from the Centre for Policy Development which identifies an over-capacity problem at existing ports:
“As the mining investment boom turns to bust, Queensland’s port capacity has already shifted from a shortfall to a surplus. Coal ports are operating at 65 per cent capacity, well below the industry average of 85 per cent.”
WICET is being developed as a peak-demand, peak-price port about 40% more expensive than Queensland’s other coal ports. Yet:
WICET has allocated 27mtpa of terminal capacity to eight customers. But, according to the analysis, those eight will only be producing 11mtpa of coal when WICET opens its coal loaders in the second quarter of 2015.
On the one hand miners could be paying for capacity they don’t use. On the other, WICET needs something like 24mtpa of throughput in order to convert its debt to cheaper funding. CLSA concluded
“We believe it is possible to conclude that volumes might never get to the 24mt needed with the producers currently contracted.”
Then there is the small problem of the railway line needed to truck the coal 500km to port.
The Queensland Government has developed a pamphlet on the Galilee Basin Development Strategy which identifies the above and other issues, such as the supply of mains power, the upgrading of roads and access to water.
Water is in fact a considerable issue, as the area has only 400 to 500mm rainfall pa, seasonal and highly variable. Artesian aquifers and water from coal seam gas are being considered. Pastoralists are naturally worried as are environmentalists. The area can be subject to heavy rains which ends up with a toxic brew from open-cut mines being pumped into water courses. The basin drains towards Lake Eyre, (now officially known as Kati Thanda–Lake Eyre).
Part of the problem is that these mines were being planned when coal was $US140, not $US80. Furthermore, the $A has been stubbornly high, whereas the rupee has depreciated. Then there is the Chinese move away from coal just as masses of US coal is being pushed onto the export market by cheaper shale gas and environmental regulation.
The climate deniers masquerading as a government in Qld see these problems as temporary and are promising a graduated royalties holiday for the first mover. Moreover, they are investing $495 million over a four-year period in “projects covering new and improved community infrastructure, roads and floodplain security” from the Royalties for the Regions initiative.
In other industries (films, motor vehicles) they call this ‘co-investment’.
All this when the IEA and others are telling us 75% of the fossil fuels in the ground must stay there.