As Adani gears up its political and media machine in a play to make it look like its proposed Carmichael mine in the Galilee Basin of Queensland is a go, it has a lot on the line.
Much of its push for the project now is ego-driven—the company has invested enormous political capital in Carmichael, and it is a massive Indian conglomerate used to winning.
But its PR spin is far ahead of the actual work being done. Adani says it intends to have 49 people working on site by the end of this year, but the company hasn’t even done a cultural-impact plan yet, one of the first steps in such an undertaking.
That means workers can’t actually do a lot onsite. Maybe knock over a few trees, get the Queensland government to tar the dirt road to the project, put out some planning-stage press releases, orchestrate some high-visibility photo-ops ahead of elections this fall. While the company has spent A$1.4m on its media campaign its onsite work has consisted mostly of repainting a rusty sign on the project gate.
Adani is vulnerable at the moment, specifically in its aim to lock in a A$1 billion government subsidy so that it can persuade potential private backers that the project can somehow become a going concern. Surging thermal coal prices and a near-term rise in Chinese thermal coal imports over 2017 (driven by an orderly Chinese government energy transition plan) has certainly helped build the company’s momentum and confidence.
The race to a heavily taxpayer-underwritten financial close is on.
So is the race against fast-changing energy markets, notably in India, which is where Adani would purport to send Carmichael coal.
Another India record-low wind energy mark was set toward the end of August (Rs3.423/kWh), and domestic coal supplies are growing.
Neither of those indicators bodes well for Adani in Australia.
Tim Buckley is IEEFA director of energy finance studies, Australasia.
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