Abbot Point is set to become one of the world’s biggest coal ports. However the yet-to-be-developed coal mines its supposed to service look increasingly unviable and the environmental risks are enormous. Jess Hill investigates. Australia has never seen anything like what’s being planned in the Galilee Basin. One mine alone, the Carmichael mine, is 40 kilometres long, and will produce 60 million tonnes of coal per year. Thats twice the size of Australias biggest coal mine. If they were to dredge that material, and dump it out onto the Reef, its only going to make the situation worse. If that material was dumped on land it would be classed as a regulated waste dump and you wouldnt be able to do anything with it. John Broomhead, former John Holland employee Its also one of the most remote. The Galilee Basin is 500 kilometres inland, and theres virtually nothing there. The Indian companies racing to mine it, Adani and GVK Hancock, will have to build almost everything from scratch: a new airport, new roads, new power and water infrastructure, and 300 kilometres of rail. Theyll also have to build the worlds largest coal port. Thats what theyre doing at Abbot Point, on the shores of the Great Barrier Reef World Heritage Area. Adani and GVK, which are both carrying billions of dollars in debt, have little to no experience in coal mining. But when they bought into the Galilee, back in the heady days of the boom, everything seemed possible. Prices were sky high, and everybody thought the good times were here to stay. But in 2012, the coal price crashed, and it hasnt recovered. A lot of assumptions that the industry made about thermal coal five years ago are no longer true, says Goldman Sachs analyst, Christian Lelong. The years of very high demand growth for thermal coal are probably gone for a long time. Thats why many of the worlds leading investment banks are saying the Galilee Basin mines simply arent viable anymore. One of them is UBS, whose commodities analyst Daniel Morgan says that for the Galilee Basin to be profitable, the coal price would have to be around AU$110 per tonne. Our long-term estimates for thermal coal prices are US$80 per tonne, he says, so even on our long-term prices it doesnt look like a compelling project to us. Adani seems to share his opinion. Late last year, in a move that went largely unreported here in Australia, Adanis Indian house broker, Morgan Stanley, reported that Adani had no intention of developing its Carmichael mine until the coal price improved. Nonetheless, both Adani and GVK Hancock are pressing ahead at Abbot Point. If everything goes ahead, theyll be paying North Queensland Bulk Ports (NQBP) to dredge three million cubic metres off the sea floor at Abbot Bay, which will then be dumped into the Great Barrier Reef Marine Park. NQBP spokesperson, Mary Steele, says Adani and GVK will decide when that dredging begins, but that it probably wont be before 2016. NQBP insists that the impact from dumping dredge spoil in the marine park will be localised, and temporary. The Great Barrier Reef Marine Park Authority (GBRMPA) would say that we know that site better than anyone else, says Steele. Weve dredged 22 times at our ports since 2002, so our experience and our observations—not just our modeling—will tell us how that plume will travel. This article represents part of a larger Background Briefing investigation. Listen to Jess Hills full report on Sunday at 8.05 am or use the podcast links above after broadcast. GBRMPA, the agency tasked with protecting the Reef, granted the dumping permit to NQBP in January. But last week, a draft report obtained by Greenpeace under Freedom of Information revealed that initially, GBRMPA recommended that the port authoritys dumping permit be refused. It cited the long-term, irreversible harm that could be done to the reef, and said that modeling provided by NQBP was found to be of limited value, deficient and unreliable. Its not the first time Abbot Point has been the focus of environmental scrutiny. In 2010, the construction company John Holland, which was contracted to double the capacity of the port, was charged with dozens of environmental violations. Faced with a maximum penalty of $69 million, the court eventually fined them $195,000 for releasing contaminants into the water at Abbot Point, and at another port in Dalrymple Bay. John Broomhead, who was John Hollands regional coordinator at the time, says that for several months, the company was letting regulated waste from sandblasting, including paint, fall into the ocean at Abbot Point. Now this paint has got zinc, chromium and all sorts of heavy metal contaminants in it, says Broomhead. When that paint falls into the water, it can affect the sole of the molluscs—the little shellfish—it actually burns the sole of the little molluscs. He says the fine John Holland received was woefully inadequate. I honestly believe it should have been something around $20 million, he says. Because it was a serious offence. They continued to break the law, not once or twice, but thousands and thousands of times. They caused willful damage up there unnecessarily. John Holland was never ordered to clean up the contaminants they dumped into the water at Abbot Point. Broomhead says there could be thousands of tonnes of it still sitting on the sea floor. Now if they were to dredge that material, and dump it out onto the Reef, its only going to make the situation worse. If that material was dumped on land it would be classed as a regulated waste dump and you wouldnt be able to do anything with it. But because its in the water and its out of sight, its acceptable to do things with it. NQBP says theres no risk that toxic material will be dumped in the marine park, because the sediment that will be dredged at Abbot Bay has already been tested. But no matter how you look at it, the projects in the Galilee Basin and at Abbot Point are an enormous gamble. Is it worth risking the health of the Great Barrier Reef for coal mines that could turn out to be unviable?
Posted on: Sun, 09 Mar 2014 08:41:54 +0000
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