'Adani mine an outrage' say two top Aussie businessmen
OPPOSITION to Adani's coal mine continues to build as two prominent Australian business leaders come out against the project.
Entrepreneur and philanthropist Michael Myer of the prominent Myer retailing family, and Intrepid Travel founder and chief executive officer Geoff Manchester, have both decided to speak out against the $16.5 billion project in Queensland's Galilee Basin.
The two men share similar concerns but were not aware of the other's views before going public.
"The mine itself is an outrage," Mr Myer told news.com.au.
"It's a stranded asset ... and the proponent (Gautam) Adani is basically doing a very good job at conning our politicians at all levels of government."
But he said the fact that governments were subsidising the project was also concerning. Federal, state and local governments have all agreed to, or are considering, providing the project with financial assistance.
Mr Myer said the economics of the project did not stack up and the leading supporters of the project were politicians, not those in the business world.
"The whole line that this is good for Queensland jobs is farcical and delusional," Mr Myer said.
"It doesn't stack up economically and as time goes on the economics get even worse."
While the governments have continued to spruik the "10,000 jobs" that will be created, Adani's own expert has admitted the figure will be closer to 1400 once jobs lost in other areas are taken into consideration.
Mr Myer believes the 10,000 number is "mythical" and the real number will likely be even less than 1400 as many operations can now be automated.
These jobs could also come at the expense of others.
At risk is Australia's lucrative tourism industry with many concerned about the impacts of climate change on the Great Barrier Reef.
"Tourism operators are very concerned about this because we've already seen some negative impact on the Great Barrier Reef from bleaching in the last couple of years," Intrepid CEO Geoff Manchester said.
"We've already had seen some local tourism operators impacted."
Intrepid runs tours around the world so Mr Manchester is not too worried about his own business but he said the reef was of huge importance to Australia.
"We are coming into an era of potential growth in Australia, Asian countries are becoming more wealthy and travelling in larger numbers," he said.
Mr Manchester said Asian tourists, especially those who lived in polluted cities, wanted to experience nature and animals they would not necessarily see in their home countries. This provided Australia with a significant opportunity to boost its economy.
"People are less interested in owning things and are becoming more interested in experiences," he said.
"They see travel as part of life rather than a luxury that you only do when you can afford it."
As leaders in their industries, both men said they wanted to voice their opposition publicly to the mine and a potential $1 billion concessional loan that the Northern Australia Infrastructure Facility is considering.
"There are lots of tourism businesses in Australia and it's hard for them to get together and speak with one voice, we hope to speak up for them," Mr Manchester said.
"We are a private, significantly sized company and I feel we have a duty to speak out against it.
"Hopefully this will make other companies feel more comfortable about speaking out as well."
Mr Manchester said tourism was the biggest employer in Australia.
"It seems wrong to be threatening the (tourism) industry, and wrong to be subsidising the (coal) industry."
Their remarks come as another entrepreneur warned Australia's economy had serious problems.
In analysis published in news.com.au today Matt Barrie and Craig Tindale point out that coal consumption in China had dropped three years in a row, and in January 2017, 100 coal fired power plants were cancelled.
"China has announced that it is spending a whopping $360 billion on renewables through 2020, and this year is implementing the world's biggest cap-and-trade carbon market to curb emissions," the authors noted.
"Blind to the reality of this situation, Australia is ramping up coal production while China commits to ending coal imports in the very near future in what can only be described as a last-ditch "dig it up now, or never" situation."
According to the Australian Bureau of Statistics, in 2015-16 the entire Australian mining industry which includes coal, oil and gas, iron ore, the mining of metallic and nonmetallic minerals and exploration and support services made $179 billion in revenue.
But it had $171 billion in costs, which meant it delivered an operating profit before tax of $7 billion - representing a wafer thin 3.9 per cent margin on an operating basis.
"Collectively, the entire Australian mining industry (ex-services) would be loss making in 2016-17 if revenue continued to drop and costs stayed the same," the authors said.
Mr Myer said companies like BHP were now getting out of coal assets because they could see the writing on the wall.
"China and India both have to, and are, decarbonising their economies," he said.
"So the notion that Adani is going to build this mine and produce 60 million tonnes a year (of coal), it's delusional."
Instead of giving Adani a $1 billion taxpayer-funded loan, Mr Myer said putting the money towards something like a Tesla Gigafactory to produce lithium-ion batteries, would create far more long term jobs than a coal mine.
"It could piggyback an electric vehicle factory," he said. "That's the future and that's where the state should be investing."
The Australian Government's Northern Australia Infrastructure Facility will be making a decision soon on whether to grant a $1 billion loan to Adani to build a 388km rail link to Abbot Point.
The Queensland Government has already agreed to a royalty deal that may allow Adani to defer the royalties it pays to the government.
Premier Annastacia Palaszczuk has said the royalties will be paid in full but has left option the possibility of royalties being deferred for the first few years.
Meanwhile local councils have been falling over themselves trying to accommodate the mine, with Townsville and Rockhampton councils both putting in at least $15 million each to fund an airstrip at the Carmichael mine.