Adani to seek billions if mine blocked

Adani has warned that taxpayers would face a multi-billion-dollar lawsuit if the state government tries to stop the Carmichael mine.

Adani chief executive Lucas Dow Dow flagged a “sizeable” claim to recover the $1.4 billion Adani has spent pursuing the project if its mine is stopped. Picture: John Gass/AAP

Adani has warned that taxpayers would face a multi-billion-dollar lawsuit if the state Labor government caves in to green activists’ demands to stop the Indian conglomerate’s Carmichael coalmine.

With the project already stalled, Adani chief executive Lucas Dow flagged a “sizeable” claim to recover the $1.4 billion Adani has spent pursuing the project since 2010, plus compensation for the company’s lost future profits.

Addressing a parliamentary hearing in Brisbane, Mr Dow put state MPs on notice of the possible legal action over a Greens bill to stop any mining in the Galilee Basin, where Adani is the lead proponent among five other coalminers.

In a later statement, Adani said the conglomerate would consider suing over any government decision that undermined hard-won approvals. “Any decision by a government that is retrospective or compromises an approval or ­licence which has guided investment and decision-making would see us consider legal action pursuing compensation,” a spokeswoman said. “Other parties who have made similar investment decisions based on government ­approvals may also consider taking legal action.”

Adani has complained about a controversial government-commissioned review into the black-throated finch, which has recommended tough new rules that threaten the mine’s progress.

Mr Dow’s comments contradicted Mines Department officials, who earlier yesterday told the same committee that state parliament could pass laws revoking mining leases without offering compensation. But they warned it could damage Queensland’s reputation among investors.

Federal Labor Treasury spokesman Chris Bowen last month raised concerns that taxpayers would be slugged if an ­incoming Shorten Labor government indulged the “passion” of some ALP supporters to block the mine. “I believe in protection against sovereign risk, and of all the things I’ve prioritised spending money on in my first budget as Labor treasurer, if it proceeds, providing compensation for Adani for a breach of contract and breach of law is not one of them,” he said on February 5.

Unlike state governments, the commonwealth is bound by the Constitution to provide compensation “on just terms” when it ­acquires private property.

Other than Adani, Mr Dow said other groups that might consider suing included indigenous traditional owners, landholders and suppliers who were depending on the mine proceeding.

James Plumb, who chairs the Queensland Law Society’s mining and resources committee, doubted those groups would be able to sue the state, although they might have a case against companies.

The Law Society has cautioned the state against cancelling mining leases without offering compensation, saying the Greens bill seemed to disregard “the rights and liberties of individuals”.

University of Queensland senior law lecturer Justine Bell-Jones said miners should expect no compensation since the growing political backlash against coal was known when they decided to invest.

“It’s not a surprise that climate change has just popped up and is an issue that governments might want to deal with,” Dr Bell-Jones said.

The committee also heard from environmentalists who said opening the Galilee Basin was not consistent with the global objective of phasing out coal-fired power to halt global warming.