ECONOMISTS CAST NEW DOUBT ON VIABILITY OF ADANI MINE

Written on the 18 March 2016 by Nick Nichols

ECONOMISTS CAST NEW DOUBT ON VIABILITY OF ADANI MINE

THE Queensland Government this week may have moved step closer to granting a mining lease for Adani's $16.5 billion Carmichael coal mine in the Galilee Basin, but at least one major economic forecaster sees little likelihood of the project ever getting off the ground.

BIS Shrapnel's senior economists, Dr Frank Gelber and Adrian Hart, say that Adani has not been factored into their forecasts for the next five years.

Hart, BIS Shrapnel's senior manager for infrastructure and mining, says the outlook for the project is 'not good'.

Hart says his initial opinion when Adani announced the project three years ago was that it would fail to proceed. This opinion has since firmed in the wake of falling commodity prices.
"I'm (now) more certain than I was that it won' t proceed," Hart says.

"We haven't got it in our numbers for the next five years. We were pretty sure right around the start of this in 2013 that it wouldn't go. But they keep spending. It just doesn't look right."

Gelber, BIS Shrapnel's chief economist, says the slump in the price of coal has all but put an end to the project.

"Before all this hit the fan, the banks wouldn't lend to Galilee Basin projects and that was when prices were double what they are now," says Gelber.

"Prices would have to more than double to ensure that this is sustainable and to underwrite the feasibility of that project."

Hart says the emergence of renewables and the ramping up of LNG production in Queensland will continue to put pressure on coal prices.

"A lot of these projects just don't stack up," he says.

"My fear is that it gets squeezed here from the low price for LNG and the continuing fall in prices that we will see over time through technological change for renewables.

"Down the track it' s not looking like very good prospects for the Galilee Basin."

New data, released this week by the Institute for Energy Economics and Financial Analysis, reveals a 10.2 per cent slump in coal imports by China and a 6.4 per cent drop in coal production in the country over January and February this year.

This is despite a 0.3 per cent lift in electricity consumption compared to the same period last year.

The BIS Shrapnel economists' views were aired at a BIS Shrapnel economic outlook briefing held in Brisbane last week.

This week, State Development Minister Anthony Lynham revealed in Parliament that Adani has reached agreement with all landholders, bringing the project closer to fruition. However, Lynham also says he is not rushing to approve the mine just yet.

The Carmichael mine still faces strong opposition from Indigenous groups who have yet to sign a land use agreement with Adani.

 


Author: Nick Nichols

Latest News

SUPREME COURT ORDERS OCTAVIAR GROUP TO WIND UP

THE Queensland Supreme Court has ordered the Octaviar Group of companies (formerly known as MFS Group) to be wound...

CEOS BRAVE THE COLD TO RAISE $1.4 MILLION FOR THE HOMELESS

MORE than 400 executives confronted the cold last night in the annual Vinnies CEO sleepout, which took place benea...

JENNIFER WESTACOTT ON BANK TAX: IT EXPOSES GOVERNMENT "DESPERATION"

South Australia's new bank levy exposes the desperation of a government that is unable to get its own budget and ...

BASKETBALL'S COMEBACK CONTINUES WITH NBL CLUBS TO FACE OFF AGAINST CHINA'S NATIONAL TEAM

THE RESURGENCE of Australia's National Basketball League (NBL) continues with China's national team to play t...

Related News

BASKETBALL'S COMEBACK CONTINUES WITH NBL CLUBS TO FACE OFF AGAINST CHINA'S NATIONAL TEAM

THE RESURGENCE of Australia's National Basketball League (NBL) continues with China's national team to play t...

DOMESTIC TOURISM IN AUSTRALIA BREAKS RECORDS, INJECTS $61.7 BILLION INTO NATIONAL ECONOMY

DOMESTIC Australian tourists have spent a record breaking $61.7 billion on intra and interstate travel this year, acc...

THE DOCTORS WHO PLUNGED INTO THE SHARK TANK AND SURVIVED WITH A $500,000 INVESTMENT

THEIR mission is to change the face of cancer care with an app that empowers and connects patients and care givers...

IMF BRACES FOR BIG LOSS FOLLOWING WITHDRAWAL FROM SPOTLESS CLASS ACTION

LITIGATION fund IMF Bentham (ASX: IMF) is set to lose as much as half a million dollars after it ceases funding one o...

BOOK YOUR FUNCTION SPACE HERE

 

 

 

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter