‘Can you dig this?’ Adani chief shows off new Carmichael mine
Standing on the lip of Australia’s newest and most controversial open-cut coalmine, Adani Australia CEO David Boshoff has a message to those who insisted it would never be built.
Standing on the lip of Australia’s newest and most controversial open-cut coalmine, Adani Australia chief executive David Boshoff has a message to those who insisted it would never be built.
“It’s great to show you this,” he said, as an excavator the size of a three-storey building crawled across the tawny central Queensland landscape. “It’s happening … this mine is happening.”
In the 15 months since India’s Adani Group was given the go-ahead by the state Labor government — capping a decade-long slog through regulatory and judicial processes, not to mention the court of public opinion — a parched reach of cattle country 780km northwest of Brisbane has been transformed into a teeming worksite.
This is the public’s first glimpse of what has been going on behind the security barrier. The initial 200m by 800m “box cut” to expose the coal seam 50m down has been partly dug, putting production on track to start next year. More than a million cubic metres of soil has so far been removed.
A 206km railway to feed into the Central Queensland Coal Network to the export terminal at Abbot Point is nearly one third complete, its construction part of the equation to determine exactly when the ore will start to flow.
Work camps with airconditioned sleeping for 1600 people and home comforts including a gym dot the route.
South African-born Mr Boshoff, 39, said the mine would be progressively developed and operated over at least half a century, in a further repudiation of claims that it had no future.
“We have detailed planning for 50 years,” he said. “It doesn’t mean the resource stops at 50 years; it just means we haven’t planned anything beyond that period.”
It’s a big call given thermal coal’s uncertain position in an energy mix that is increasingly dominated by renewables and the imperative to reduce greenhouse gas emissions.
How could Adani be confident there would be customers in 20 years’ time, let alone five decades out? Mr Boshoff pointed to the heavy investment by the Indian parent company, a ports and energy conglomerate, in solar power generation.
“Of course there is always a question that plays on people’s minds,” he said of the future demand for coal. “I think the benefit we have as an organisation is that we are the No 1 solar energy producer in the world and we also have a thermal coal business. So that in itself gives us a very unique position of being able to study both markets really well.”
But scepticism persists whether the numbers stack up to justify the $2bn Adani is ploughing into the mine. The company says it has let contracts amounting to 75 per cent of that budget and has met a target of creating 1500 jobs.
Mr Boshoff said the mine’s viability was underpinned by the quality of the ore — at 5000 kilocalories, 28 per cent higher than the Indonesian coal it aims to compete with, but less than Hunter Valley thermal coal — and a relatively favourable 4-1 “strip ratio” of waste rock and dirt to each tonne of coal extracted, reducing operational costs. By contrast, some mines in the neighbouring Bowen Basin have a strip ratio of 7-1.
“We are financially competitive and … it is up to us to stay that way,” he said. “But as we stand here today, the 10m tonne operation we have put together is financially competitive.”
Australian Conservation Foundation campaigner Christian Slattery was unmoved, telling The Australian: “There is no future in thermal coal, demonstrated by the increasing numbers of investors abandoning it.”
The anti-Adani backlash forced the company to go it alone to fund the mine after Australian lenders baulked and the state government pulled support to access the Northern Australia Infrastructure Facility for the rail link.
But despite the setbacks, the first year’s production of 10m tonnes has already been sold, mostly to the parent group in India.