$1.5 billion upfront cash bond needed for Adani mine rehabilitation liability – report

Published: May 24, 2017

New analysis by Lock the Gate Alliance released today estimates that it would cost at least $1.5 billion to rehabilitate the Adani Carmichael coal mine in Central Queensland.

The detailed analysis has been undertaken using publicly available documents regarding the planned rehabilitation and closure strategy proposed by Adani Mining and applying the Queensland Government’s standard financial assurance calculator plus a contingency.

The Alliance is calling for the bond to be paid upfront, to prevent Australian taxpayers bearing all the risks because Adani Mining Pty Ltd is in a parlous financial position and is only solvent due to support from its parent company in India.

“There is a massive risk that Australian taxpayers will be left to cover the costs of part or all of the rehabilitation of the Adani coal mine,” said Carmel Flint, spokesperson with Lock the Gate Alliance.

“We estimate that the financial assurance required for the first five years of the full 60Mtpa mine plan should be at least $1.5 billion in order to protect taxpayers from financial risks”.

Although there has been speculation that Adani is contemplating ‘downsizing’ the project, it is the 60Mtpa mine that has been approved and as far as Lock the Gate can ascertain there has been no revised proposal submitted.

“We believe that the Queensland Government should require that Adani Mining pay the amount as an upfront cash bond, to prevent taxpayers ending up with the bill.

“It is crucial that the financial assurance is calculated in a precautionary manner, in order to protect Queenslanders from major financial risks.

“If Adani Mining are not required to put up an upfront cash bond, then the costs of rehabilitation will effectively be another massive subsidy from taxpayers to enable Adani Mining to commence a mine that will leave a far-reaching environmental legacy,” she said.

The analysis by the Lock the Gate Alliance should be considered a conservative estimate, as it only takes account of some elements of rehabilitation such as open cut voids and slopes, out of pit dumps, tailings dams, mine affected water dams and stream diversions.

The Queensland Government has started a reform process for mining rehabilitation, and Lock the Gate is calling on it to deliver on that for the Adani Carmichael mine.

The Queensland Government should require that: 

  • Detailed transparent analysis be undertaken before the mine’s Plan of Operations is signed off by the Department of Environment and Heritage Protection
  • Financial assurance are calculated using transparent processes based on best practice standards with independent expert review
  • There should be no financial assurance discounts for Adani Mining and they should not be allowed to use their own financial assurance calculator
  • The mine Plan of Operation must require the company to restore the original contour of the land, prohibit final voids and undertake progressive rehabilitation.

Contact – Monique Vandeleur 0419 588 430

Analysis: https://d3n8a8pro7vhmx.cloudfront.net/lockthegate/pages/3853/attachments/original/1495589540/Adani-Rehab-Report_V3.pdf?1495589540

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