For a long time the Galilee Basin has loomed large in Australia as the next big fossil fuel fight, it’s been likened to Keystone XL in the US and represents a veritable ticking carbon time bomb. Last month 40 people from across Australia took the long journey out to this massive proposed coal field. This is Part 2 of a 3 part series.

After the moving experience on Springwood (see part one here) we headed further west , in to the Galilee Basin proper. Our first stop was to meet with Bruce and Annette Currie, key figures in the recent court challenge to the Alpha Coal mine project, which is proposed by Indian company GVK and Gina Rinehart’s Hancock Coal

Speculation

Bruce and Annette run a cattle property called hour outside the small town of Jericho. Over the years, with the help of their kids, they have built up a profitable business with a core principle of sustaining the land and their business in perpetuity. Speculation sits within the Desert Uplands Bio Region – which is defined by sandy soils that support a surprisingly diverse array of tussock and other native grasses; hardy acacia and eucalyptus species; and a wide diversity of bird life. Contrary to the image of a desert most of us held, this was a vibrant and diverse ecology. Sitting at the head waters of the Lake Eyre and Burdekin catchments it serves an important role in water recharge for both above ground and underground water sources, including the Great Artesian Basin. The Curries are actively involved in the management committee that seeks to integrate social, economic and environmental uses of this  bio-region.

But now, due to GVK-Hancock’s proposed Alpha coal mine, the hard work Bruce and Annette have put in to this land and business is at risk. The major concern is that the mine, which will neighbour their property, might interfere with important water aquifers. Several bores on Speculation provide the majority of the water used on the property. As the mine is dug their is the potential that connectivity will develop between the pit and the aquifer which the Curries draw from, this would effectively drain away their water supply. Now Bruce stressed that they cannot know for sure whether this will occur, but nor can the mining companies. Their appearance at the  Land Court wasn’t based on expert analysis and legal representation, rather Bruce and Annette represented themselves and simply showed that the GVK/Hancock’s own reporting was inconclusive about the potential impacts. This is the ‘speculative’ and risky nature of this industry, it was becoming clear to us why so many landholders feel ill informed to negotiate with the big mine companies.

Just a few weeks before we left Brisbane, the Curries heard the  verdict of the Land Court Case which along with the  potential water impacts had  also considered biodiversity and climate impacts. . In a landmark decision, the judge found that unless conditions could be met to assure the precautionary principle was applied in managing water impacts on the adjacent properties, that the mine should be disallowed. The Curries and the other complaintifs had mounted a strong argument, by showing the inconclusive  reporting developed  by the mining companies. The decision doesn’t mean the Curries and other landholders are  off the hook – there is still a lot of wiggle room for the miners, but it provides a much stronger platform to negotiate from.

Stranded Assets

We spent that night in the small town of Jericho, a town of around 50 people who live on the edge of the  proposed mine development areas. At the showgrounds that night we hosted a public talk and invited local landholders and community members to join us for a discussion of the finances of the proposed mines. The talk was given by Tim Buckley, from the Institute for Energy Economics and Financial Analysis. Tim’s keycontention was that regardless of the mines environmental, social, water and agricultural impacts (and these are significant), the projects may not be financially viable. To summarise Tim’s arguments:

• The mines are incredibly remote and so the required infrastructure (particularly the rail)  will come at enormous expense.

• Key export markets, particularly China, are clamping down on their use of coal, because of concern for health, water and climate impacts.
• If the 9 Galilee Basin mines were opened up, they would increase global seaborne coal trade by 30%
• Renewable Energy prices continue to fall and their uptake  increase.

• As a result the price of coal is expected to remain at or below a breakeven price for these projects – making the capital investment costs and related environmental and social impacts even more pointless.
• The two front runners Adani and GVK are Indian companies without any successful experience in coal mining, let alone the biggest coal mines in Australia.
• Both companies have high levels of debt and are not well leveraged to raise the massive amounts of capital required to get these projects off the ground.
• Despite attempts from both Adani and GVK to sell down their ownership in the mines recently, there has been little interest from potential buyers.

As a result of the above, Tim’s  analysis is that these mines are in a precarious position and that it would take some significant and unexpected changes in the global coal price or some big investors, willing to take significant risks, to get these projects off the ground. 

Listen to an interview with Tim here and read more on the IEEFA website.

A local perspective

Though Tim’s talk focussed predominately on global financial dynamics, the issues he discussed have huge significance to the people of this region.

After the presentation we spent several hours chatting with the people from Jericho and landholders that attended the session. From those discussions, many of  us found that two key concerns were shared by most of these people.

Firstly – the difficulty of gaining reliable information about the plans of the mining companies and the potential impacts. Despite what might be said in the PR strategies of  these companies, there has been very  little consultation or information sharing with the folks on the ground out  here.

Secondly – that there was a desperate need for some form of development in the region. A number of folks were involved in the local services sector, and were doing it tough due to the flow on impacts of the live cattle export and the more general decline taking place in rural economies.  Most were ambivalent to whether it was mining or some other form of development, say a renewables project, that brought jobs and development to the area — they just needed something. Already they’ve experienced some of the boom-bust of the mining industry out here. Back in 2011, at the peak of the coal price there was a flurry of activity from the coal companies to begin testing the land, drilling test bores and beginning to negotiate with landholders. This brought a number of workers to the region and for a while some of these communities experienced an uptick in business. But as the coal price has receded to the shadowy depths of $70-80 per tonne, so to have most of the workers. The very clear message for us is that they simply couldn’t  afford this kind of non-committal approach to regional development.

Though we all sympathised with the message we heard from the folks of Jericho, we were left with the realisation that we would have to contemplate and learn about these issues in a lot more detail. As the campaigns grow to stop the Galilee Basin mines, we would do well to communicate an alternate economic vision at the same time. Transition economics is a space many of us are committed to learn more about and incorporate in to future campaigns and road trips.

The next morning we packed up our tents, stopped by the general store in Jericho to contribute a little, and headed off for the famous Bimblebox Nature Refuge.

More on that in the third and final part of this blog, due out later this week.