07/29/2014 01:28 EDT | Updated 09/28/2014 05:59 EDT

New Coal Mine Construction Is a Giant Step Back For Australia

For Australia, coal remains king. The nation, one of the world's top coal exporters, approved construction of the country's largest coal mine Monday. Environmentalists say the decision is a major setback for efforts to fight climate change and further tarnishes the government's global image.

For Australia, coal remains king. The nation, one of the world's top coal exporters, approved construction of the country's largest coal mine Monday.

Environmentalists say the decision is a major setback for efforts to fight climate change and further tarnishes the government's global image.

Environment Minister Greg Hunt gave the go-ahead for the Carmichael mine in Queensland that will tap the state's vast coal reserves in the Galilee Basin. The $16.5 billion mine and railway project, owned by a subsidiary of India's Adani Group, will produce up to 60 million tonnes of thermal coal a year once fully developed. The mine will have a 90 year lifespan.

Greens say coal from the mine, when burned in power stations, will produce about 130 million tonnes of carbon dioxide a year, the main greenhouse gas. That's about the same emissions from 27 million average cars. Burning coal, in power stations and for steel manufacturing, is the single largest source of CO2 globally.

Australia's federal government, led by Tony Abbott, has been a major proponent of mining as a way to create jobs and grow the economy but has increasingly faced criticism at home from residents deeply opposed to new mines and the environmental problems they cause. He has also been criticized for rolling back climate policies, cutting climate change science funding and denying that climate change is behind increasingly extreme weather.

"History will look back on the Abbott Government's decision today as an act of climate criminality," said Senator Larissa Waters, the Australian Greens environment spokesperson.

Adani wants the coal to feed India's rapidly growing demand for energy.

But to get there, the coal will have to be sent hundreds of kilometres by rail, and then loaded on to ships that need to berth at ports along the Great Barrier Reef. Local residents and greens fear the shipments and the need to greatly expand coal loading ports, including major dredging projects, will harm the reef, threaten tourism jobs and greatly increase the risk of shipping accidents.

"Australia should be leading the way on renewable energy rather than condemning India to worse air quality and subjecting the world to more extreme weather disasters," Waters said.

The approval comes two weeks after the Abbott government succeeded in scrapping a nationally legislated carbon price. It also comes before a special climate change summit hosted by U.N. Secretary-General Ban Ki-moon in September. Abbott will not be attending, media reports say.

The summit is an opportunity for world leaders to show their actions on climate change and to make fresh pledges ahead of a major UN climate meeting at the end of next year in Paris that is meant to agree on a new climate pact that is, ideally, built on tougher emissions reduction commitments.

Greens say new coal mines are a big step in the wrong direction. A surge in extreme weather globally and rapidly growing CO2 levels in the atmosphere has alarmed the World Bank, United Nations, International Energy Agency and green groups, which say the world needs to step up investment in in cleaner energy, such as wind and solar, and promote greater energy efficiency.

Hunt said the 45,000-hectare (112,500-acre) Carmichael mine, if it goes ahead, must meet 36 conditions, including biodiversity offsets and water management. The Queensland state government has imposed 190 conditions on the project, which includes a mix of open pit and underground mines.

The state government says the mine will be a major boost to the local economy, providing more than 6,000 jobs and several billion dollars a year in royalties -- assuming it reaches full production.

"This project has the potential to be the largest coal mine in Australia and one of the largest in the world," said Deputy Premier and Minister for State Development, Infrastructure and Planning, Jeff Seeney, in a statement.

Greenpeace says the economic benefits pale against the potential risks to the Great Barrier Reef from increased shipping, dredging and climate change. As rising temperatures cook the reef, it threatens to kill off the A$6 billion a year tourism industry centered along the coast.

The Adani mine is the fourth coal project approved for the Galilee Basin. The three others, totalling 100 million tonnes a year, are owned by Indian and Australian interests. Other coal mines proposed for the area and elsewhere in Queensland are in the environmental impact assessment stage.

The federal government also recently approved the 20 million-tonne-a-year Cobbora mine in New South Wales state.

Greenpeace fears if all the coal mines proposed for the Galilee Basin go ahead, the emissions from burning the exported coal would total about 700 million tonnes of CO2 a year -- more than Australia's total annual greenhouse gas emissions. That additional amount of CO2 would speed up the point at which the planet reaches warming of two degrees Celsius, the threshold scientists say risks dangerous climate change.

For the moment, it looks like many of the Galilee Basin mines won't go ahead. Global coal prices are too low at present for the mines to be profitable and the outlook for international coal demand too uncertain. Major consumers India and China will remain big coal users but both are also investing heavily in renewables and have large domestic coal deposits.

Benchmark Newcastle coal prices are currently below $70 a tonne free-on-board (FOB), down more than 10 per cent over the past year and far below their 2011 peak of just over $130.

"This is a $16 billion project that requires a coal price north of $100 a tonne sustainably," Tim Buckley, of the Institute for Energy Economics and Financial Analysis, told ABC Television.

"The coal price in the last three years is down more than 50 per cent to below $70 a tonne for thermal coal. To me, there is such a major point of difference between what is required versus what the current status is, that this project is going to remain stranded," he said.

The state government is determined for the project to succeed.

"The Queensland Government will continue to work with project proponents, the Adani Group, to ensure the project is given its best possible chance of proceeding," Deputy Premier Seeney said in the same statement.


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