Subjects: Northern Australia Infrastructure Facility; Adani Carmichael mine
CRAIG ZONCA:
But first, the Prime Minister will meet with the global head of mining giant Adani today. It comes as the State Government signs off on final approvals to construct a rail line for the company’s controversial Carmichael project, along with a 300-man workers’ camp. It’s also reported the Federal Government is considering a billion dollar loan to Adani to fund the rail line from its Northern Australia Infrastructure [Facility].
The Minister for Resources and Northern Australia is Senator Matt Canavan. Senator, thanks for joining the Country Hour.
MINISTER CANAVAN:
No worries, Craig. How are you?
CRAIG ZONCA:
Not too bad, thanks. How advanced is Adani’s application for funding from NAIF?
MINISTER CANAVAN:
Well, no decision’s been made just yet. They’ve made a proposal and also after the Queensland Labor Government put forward this project as one that possibly could receive funding, the Northern Australia Infrastructure Facility is assessing it and a number of projects at the moment. It has decided to take the Adani Carmichael mine rail line to the next stage, if you like, to do some more due diligence. But there’s still a process to go through and, as the minister, I’m not allowed to direct or tell the Northern Australia Infrastructure Facility – they’re a skills-based, expert, independent board – and I’ll let them do their job.
CRAIG ZONCA:
But as the minister responsible, is it something you personally support?
MINISTER CANAVAN:
Well, it’s not something I’m going to give direction to the board about. What I would say is any project that we’re going fund at the Northern Australia Infrastructure Facility has to meet some strict guidelines about its wider economic benefit. And also, of course, these are loans, so we’re seeking to have them repaid. That’s why we’ve got a skills-based board to look at all the stuff.
CRAIG ZONCA:
And I ask because it would be a substantial piece of the bucket that the NAIF fund is; $5 billion on total, a billion dollar potential loan to Adani. That’s 20 per cent of that funding gone in one fell swoop.
MINISTER CANAVAN:
It is Craig, and what I would suggest is that it’s not necessarily going to be that total. But basically the way the maths work on this, Craig, is that the rail line is roughly $2 billion, we will only lend up to 50 per cent of the debt as a ceiling, if you like, but that doesn’t mean it would be of that size necessarily.
CRAIG ZONCA:
Now, you mentioned it is assessed on its wider economic benefits, along with a number of other criteria. Some commentators have suggested the finances don’t stack up for the Carmichael project. If a loan is approved under NAIF, is the Government, or could the Government, effectively be propping up a project for which the economics don’t stack up?
MINISTER CANAVAN:
Well, that’s why we’ve got this board in place. They’ve got significant experience in infrastructure finance, both from an economic and legal perspective with different members of the board, so that’s why they’ll assess those particular issues and risks. I would say it’s not unusual for governments, of course, to invest in infrastructure. There are lots of different developments. Indeed, the Federal Government, the Menzies Government, helped build the original rail line for Peabody that connected up to Gladstone that built the Bowen Basin region. Obviously, that’s had a huge benefit to Central Queensland and to North Queensland. Likewise, the Australian Government leases from the New South Wales Government, the Hunter Valley coal network. About ten years ago we made a $150 million investment there to upgrade that network.
So, it’s not unusual for governments to be involved, obviously, in these kinds of investments, particularly in this case where it’s opening up a whole new coal basin. It’ll be the first time in 40 years that we’ve opened up a new coal basin. And someone has to move first, and that’s pretty risky if you do.
CRAIG ZONCA:
Well, to that end, would there be a requirement that should the Government fund this rail line, that it is open to multiple users, not just Adani?
MINISTER CANAVAN:
That’s one of the terms of the NAIF funding, and not for, Adani per se, but just to be clear, we’re only interested in investing in infrastructure which can have a multiple use component, a common use component. And likewise, it’s a State Government matter, but my understanding is their planning for the Galilee Basin has been that they don’t want a Pilbara situation, they don’t want lots of private companies building their own rail lines and over-building infrastructure in the region and also exacerbating the impact on land owners by having multiple rail lines. So, there are two identified rail corridors from the Galilee Basin and both of those rail corridors will have to be common users so that other mines in the Basin can use them.
CRAIG ZONCA:
If that loan wasn’t approved, would the Adani project still be able to go ahead?
MINISTER CANAVAN:
Look, I can’t answer that question, Craig. That’s obviously a matter for Adani itself. I mean, they have certainly progressed this project, which is positive. They’ve put in an application, obviously, for finance under this facility. Obviously I’m sure they’ll be talking to other people but it’s a matter for them. If I can say, I think it’s a good thing and a positive thing that they are still here, it has taken a long time to get here. It hasn’t really been their fault; it took us more than 1,900 days to approve the project, more than five years. I think that’s absurd and we shouldn’t take 1,900 days to say yes or no to a $16 billion project as a country. We should make up our minds quicker than that. But we have got there and Adani is still here, and we potentially still have this project to happen in an area of our country which is suffering at the moment. We’ve got more than 10 per cent unemployment in Townsville. It’s difficult right across the region. This would be a huge shot in the arm for the region if it can go ahead, but there’s obviously still a few things, a few hurdles to jump over yet before we get there.
CRAIG ZONCA:
You say it would be a great thing to go ahead; others disagree with that. Just have a listen to these protesters outside a meeting in Melbourne today where the Prime Minister is due to at least meet up with the global head of Adani, Guatam Adani.
(excerpt)
CHANTING:
Reef not coal! Reef not coal!
PAUL SINCLAIR – AUSTRALIAN CONSERVATION FOUNDATION:
Every day that we stop Adani digging that coal is a day that this planet is free from its pollution. Every day that we stop Adani digging this coal, renewable energy grows stronger in this country.
(end of excerpt)
CRAIG ZONCA:
Paul Sinclair there from the Australian Conservation Foundation. Senator, you have been publicly a big supporter of the Carmichael project, but you’ve got to acknowledge that there are plenty who aren’t.
MINISTER CANAVAN:
Yeah well obviously I disagree. I think that those particular comments you’ve just played there are completely wrong and misguided. In fact, the development of this particular mine will be a net plus for the environment, it’ll be a good thing for the environment, because our coal has a higher calorific value than coal in other countries. Indeed our coal typically in Australia is about a third better in terms of calorific terms than in India. That means that for every tonne or kilogram of coal burned, a coal fired power station produces less carbon emissions per unit of electricity produced. So that’s a good thing for the environment. It will help reduce emissions if we develop our coal and provide that, because India, they’re going to expand their coal fired power production. They have about a quarter of [their population] without electricity. That will happen, and they will get their coal from somewhere. It would be best for the environment if they got it from Australia.
CRAIG ZONCA:
Greens would disagree with that, they say that direct link with the health of the Great Barrier Reef as well, putting that at danger and at risk, something that’s…
MINISTER CANAVAN:
This mine is 380 kilometres from the ocean, let alone the reef. 380 kilometres. I mean, there are of course issues to be managed with every major project, as there are with this. That’s why we put the strictest conditions, more than 30 conditions from the Federal Government and then even more from the State Government on this project. It’s going to be exporting out of an existing port, Abbot Point, which already exports coal with no detrimental impact to the reef. So we can still have economic development in North Queensland.
I think it’s very instructive that the people you just played and quoted are from Melbourne and indeed the main people taking a court case against Adani right now, the Australian Conservation Foundation are based in Melbourne. They’re entitled to their views, but I want to develop North Queensland. I don’t want us to end up like North Tasmania, or a version of North Tasmania. I want to have industry, I want to have development, I want to have jobs, and the people of North Queensland deserve their say and I must say, it’s overwhelmingly supportive people I talk to in North Queensland.
CRAIG ZONCA:
Senator Canavan, you said issues to be managed. Are you at all concerned by Adani’s track environmental record in India itself?
MINISTER CANAVAN:
Not that I’ve seen, Craig. Obviously all of those things were assessed by the Department of Environment, and …
CRAIG ZONCA:
Well their track record wasn’t assessed …
MINISTER CANAVAN:
No, that is part of what is looked at when these applications are put in place, and it has been approved. It’s gone through. We have some of the, I think, probably the most strict environmental regulations in the world, particularly at the Federal Government level for the oversight we have through the EPBC Act and its impact on the Reef. The Great Barrier Reef is a trigger under that act, and we should be proud of that, but part of that is also that when the umpire, in this case the Department of Environment makes a decision, goes forward with something, I think we can go forward in confidence that this project will both both protect the environment and also be a good economic boom for our region.
CRAIG ZONCA:
Senator Canavan, just before I let you go, Townsville is mooted as the headquarters for Adani, an announcement expected tomorrow. As far that’s concerned, can you share any further information?
MINISTER CANAVAN:
Well look, it is an announcement for Adani to make, but yes, they will be up in Townsville, and they’ve committed to developing a regional headquarters. It’s very good of them; my understanding is that most of their staff will be based in a regional area, which is great news for North Queensland. There’ll be some announcements of course tomorrow, but there’ll be further I think things going forward as well. They’re looking at establishing a fly-in, fly-out base somewhere. There’s not really a town near this mine, so it will have to be fly-in, fly-out, to build it at least. So there’s a lot of opportunities right across North Queensland from this, and as I say, it’s very exciting. It’s the first time in 40 years really since the Bowen Basin’s developed, and we could potentially get another area developed for our nation, which produces huge amounts of economic wealth, lots of good paying jobs, and we need jobs right now in Northern Queensland.
CRAIG ZONCA:
Senator Canavan, thanks for your time. Really appreciate it.
MINISTER CANAVAN:
Thanks Craig, have a good day.
(ENDS)
