The day I arrived in Townsville, late last year, a group of 30 people gathered on the wall of the Ross River Dam and prayed for rain. After three failed wet seasons, it was at less than 15 per cent capacity and the city was paying $30,000 a day to pump water from the Burdekin Dam.
Gautam Adani has also seen his share of petitioning up here. Against a glum backdrop of young adults standing beside main roads holding placards begging for work, this Indian billionaire, relatively unknown in Australia, is touted as the man who will turn things around. It seems Townsville's falling-out with another mining magnate, Clive Palmer, casts no shadow.
"Clive wouldn't be able to walk the streets here," one local told me, proudly and bitterly. Palmer, who gave away 55 Mercedes-Benz cars and 700 overseas holidays to his employees at the Yabulu nickel refinery in 2010, is now a local pariah. The refinery that he took over from BHP in 2008 is in limbo, while Townsville City Council is pursuing Palmer for $700,000 in unpaid rates. Last year, the federal government paid $73 million to Palmer's former workers. State bureaucrats, firefighters and police are now managing the risky refinery – where one smokestack is at risk of collapse and toxic sludge from its storage dams have seeped into waterways.
But that was Palmer; this is Adani.
It was December 2016 when Gautam Adani flew into Townsville to meet Queensland Premier Annastacia Palaszczuk and the city's mayor, Jenny Hill. Yes, there was some animosity: a couple of hundred people gathered on the foreshore to protest against Adani's proposed coal mega-mine, and two native-title owners, Carol Prior and Ken Dodd, were also on his trail.
But for the nation's kingmakers, Adani may as well be Midas. That very morning he had nipped down to Melbourne to meet Prime Minister Malcolm Turnbull to discuss the Coalition's "conditional" offer to chip in a $1 billion loan to his project. After the meeting in the Townsville City Council chambers, there was the obligatory handshake photo with the Queensland premier, and then he was gone – a "fly-in, fly-out" billionaire.
"You can't get the smile off my face," Annastacia Palaszczuk told the gathered reporters. Townsville was going to be the base for Adani's regional headquarters and remote operations centre. But there was more. Palaszczuk continued: "I'm pleased to announce today, that following the meeting, I have got an iron-clad guarantee from Mr Adani that there will be no 457 visas as part of the workforce for this major project. I secondly have a guarantee of a Queensland-first policy for jobs and especially for regional Queensland."
Not that it was in writing. The only assurance Queenslanders truly had was a photo of a handshake. The premier ought to have stopped there, but she kept going. The project, she said, would generate 10,000 jobs. "The life of this project will be anywhere between 50 and 60 years."
Queensland Premier Annastacia Palaszczuk with Adani Group chairman Gautam Adani at the Port of Townsville last December. Photo: Supplied
In 2013, a television commercial for Adani Australia was broadcast across the state. A warm European woman's voice asked, "What does Adani mean to Queensland? A fresh stake in the global economy …Adani means 10,000 jobs for Queensland workers [cue image of young man in hi-vis vest unspooling cables, smiling boyishly] … Adani means $22 billion in royalties and taxes invested back into Queensland communities [cue hospital corridor and stretchers]."
Here's hoping Palaszczuk doesn't pin all her policies on the commercials she watches. Is it possible she is unaware of evidence given under oath by Adani's own hand-picked expert, Jerome Fahrer, in the Queensland Land Court? A former Reserve Bank economist, Dr Fahrer works for consulting firm ACIL Allen, contracted by Adani to analyse the mine project's numbers. Fahrer was critical of Adani's previous consultants.
The figure of 10,000, he told the court, was "extreme and unrealistic". At the peak of construction, Dr Fahrer estimated, there would be about 2400 workers. But there was a catch. He found that these jobs would come at the expense of around 1500 jobs in manufacturing, agriculture, and from other mines. This is important. For a premier under pressure to create jobs in a state with a population of 4.6 million, of whom more than 160,000 were unemployed in May this year, supporting a coalmine that will see job losses from elsewhere seems a serious folly. Overall, Fahrer said the Adani mine and railway would create "on average around 1464 employee years of full-time equivalent direct and indirect jobs". In other words, a drop in the ocean. Supporters of the project are quick to point out that Fahrer did not include jobs associated with the port expansion at Abbot Point; however, Rod Campbell of The Australia Institute noted in The Australian that a large coal port expansion in Newcastle was expected to create no more than 80 jobs.
We need Adani. It’s the next big thing.Townsville mayor Jenny Hill
As for $22 billion in royalties and taxes invested into Queensland communities, The Australian's Sarah Elks wrote that Adani estimates this will be generated over the proposed mine's first three decades – amounting to $730 million a year. However, the equation that led to this estimate is, of course, "commercial in confidence" – and the myriad companies that make up the Adani conglomerate make it nearly impossible to follow the money. What tax on profits will be paid in Australia? How much will be siphoned off to Adani's "marketing hub" in Singapore and the Adani family company in the Cayman Islands?
A mural of Adani and Turnbull by artist Scott Marsh in Chippendale, Sydney. Photo: Facebook
A similar mystery surrounds royalties, which is what the mining sector pays to the state for the stuff in the ground. The Minerals Council of Australia, a hefty lobbying group, refers to royalties as part of the "total tax burden". Considering that it is paid on the product, can it really be called a "burden"? Recent reports revealed the Queensland Labor government had split over an offer to Adani of a "royalty-free holiday" of up to $320 million in concessions. In response, Adani announced it would postpone the decision to push ahead with the Carmichael project. In late May, Labor agreed to offer Adani a reduced royalty rate for the first few years, after which the company will have to repay the deferred royalties, plus interest.
With the tiniest tug, the promise of "10,000 jobs, $22 billion back into Queensland" is easily unravelled. Perhaps the simplest question is: will the Adani project put back into the economy what has been spent to support it – $10 billion on coal-related infrastructure from the state government in the past decade alone?
Palaszczuk continued with practised emphasis: "That means generational jobs. That means you can work on this project and your son or daughter may have the opportunity to also work on this project."
Um, "remote operations centre" anyone? A few weeks earlier, the Australian CEO of Adani Mining, Jeyakumar Janakaraj, had confirmed all mining operations from pit to port would be fully automated. "In our minds, this is the mine of the future," he said.
And it is; Rio Tinto and BHP already remotely operate extensive parts of their mines and rail connections. Journalists and academics Guy Pearse, Bob Burton and David McKnight reveal in their book Big Coal that in 2012, Rio Tinto replaced 380 train drivers with computers and Perth-based operators, proudly announcing at an investor seminar that robotics had so far saved the company from employing 900 people. Guardian journalist Oliver Balch this year described the odd sensation of watching driverless trucks in Rio Tinto's Pilbara mines: "Huge trucks trundle along the mines' reddish-brown terraced sides laden with high-grade iron ore. Back and forth, almost endlessly. Watch for long enough, however, and you'll see that no one ever steps out of the cab. No lunch stops. No toilet breaks. No change of shift."
A driverless haul truck on the move in Western Australia's Pilbara. Photo: Louie Douvis
Gautam Adani arrived on the Australian mining scene in 2010. His flagship company, Adani Enterprises, purchased Linc Energy's massive deposit of thermal coal in the Galilee Basin in western Queensland. Adani is one of India's most powerful men, and his company's vast influence is often linked to his proximity to Prime Minister Narendra Modi. Perhaps the most cited example of this is a photograph published in May 2014, on the day Modi was to be sworn in. In The Citizen, an Indian news site, Paranjoy Guha Thakurta explained: "The photo depicted Modi leaving Ahmedabad, the biggest city in Gujarat, the state where he had been Chief Minister for nearly 12 years from October 2001 onwards, to travel to New Delhi to be sworn in as Prime Minister of India. His stretched hand waving (presumably to an adulatory home crowd), the colourful logo of the private aircraft he was about to enter was clearly visible in the picture. It said: Adani."
It is no secret Adani and Modi are close, but Modi did not make Adani: after all, one has to have millions to make billions. The businessman's rise from sorting diamonds as a 16-year-old in his cousin's Mumbai business to earning his first million in the trade by the time he was 20 is the stuff of legend. From there, Adani went into the plastics business with his brother and, by 1988, had started an import and export company that soon expanded into infrastructure and power generation.
Today, he owns a dizzying array of companies: interests in India include ports, property development, oil and gas exploration, coal mining and trading, coal-fired power stations, and cooking oil (think palm, soy-bean, cottonseed, nut plantations). Recently, Adani has also become India's largest producer of solar power.
Now the proud owner of a coal deposit in Australia, Adani plans to build a 388-kilometre railway from Abbot Point port to the Galilee Basin, under which lies one of the world's largest untapped coal seams. Adani plans to produce up to 60 million tonnes of coal from the Carmichael mine every year for 60 years. It would be the biggest coalmine in Australia. The coal is thermal, which is mostly used to generate electricity. The company's plan is to ship it through the Great Barrier Reef to its private port in India and feed it into its power stations. Waiting in the wings for Adani to start shifting "overburden" – mining-speak for bushland, gums and bottle trees, red dirt and aquifers, layers of roots and sediment that compressed the Permian-age plant matter into coal in the first place – are five more mining companies. The Galilee Basin has been divided into nine proposed mega-mines. Australia is the world's second-largest exporter of coal. At full production, the Galilee Basin is expected to double Australia's coal exports to more than 600 million tonnes a year.
The coal seam would, when burned, blow up to one-tenth of the world's total carbon budget – the amount scientists say we have left if we want to stop at 2 degrees Celsius of warming (see breakout).
In their way, holding the line, are a scattering of traditional owners and a grazier. Behind them is a vast network of willing activist bodies, conservation groups, academics and marine scientists.
The stage is set.
Adani Australia chief executive Jeyakumar Janakaraj (third from left), met with local politicians and business leaders last December including Queensland Premier Annastacia Palaszczuk (on his right) and Townsville Mayor Jenny Hill (on his left). Photo: Supplied
"These cells multiplied in the oceans and some put out oxygen and this oxygen changed everything." I was confused. I'd asked the mayor of Townsville, Jenny Hill, if she accepted the science of global warming. Hill has a background in science, so I was aware the mayor could run rings around me if she wanted to, but I was trying to keep up.
"Are you talking about the beginning of life on Earth?" I asked in a squeaky voice. Hill nodded – a little sheepishly, I thought. Three and a half billion years ago seemed pretty far down the garden path to lead me. There had been a couple of these moments. Near the beginning of our interview, Hill had thrown in Aboriginal Australians for good measure. She had just visited Palm Island, she told me, where the locals were keen to work on Adani's mine in the Galilee Basin. "Indigenous people want to connect with their homeland," she said.
"By digging it up?" I asked – and honestly I did not say this to be a smart-arse. Australia's Indigenous people are long overdue a fair share of the nation's growing economy. But this argument, often thrown in the path of anti-coal activists, was all muddled up in Hill's office. I wasn't sure that the desire to connect with one's traditional land was the same as mining it. As for the number of jobs Adani was going to provide in Townsville, Hill would not be drawn on an exact total: "I have a number I am comfortable with."
Then I asked Hill about her moral responsibility to future generations of Townsville residents if the demise of the Great Barrier Reef is unchecked. In 2013, the federal government released a study on the Great Barrier Reef's contribution to Australia's economy. It found the reef generated 69,000 jobs and $5.68 billion in annual turnover in 2011-12.
Snorkellers looking at bleaching corals off Port Douglas in March this year. The Great Barrier Reef generated 69,000 jobs in 2011-12, according to a 2013 Federal Government study. Photo: Dean Miller
Beyond this, cyclones, floods, fires and drought have always been a way of life in the north, but events in recent years have been relentless. Following floods in 2009 and 2010-11 that claimed the lives of 38 people, Queensland's then premier, Anna Bligh, noted: "Every time we settle into the task [of recovery] we get a new task added to our plate." The federal government poured $5.6 billion into reconstruction after these Queensland floods. What about those responsibilities? Hill, in response, looked me straight in the eye. "I've a community with a high rate of unemployment and a huge spike in youth crime. What about my moral responsibility to Townsville today?"
The city is certainly on an uneven keel. The image of a spaghetti-western town came to mind as I passed big nightclubs, closed, some permanently, the odd shop doing limited trade – one closing down had a couple of backpackers picking over African trinkets. There were vacant and shuttered buildings, teenagers' names written in the dust and grime, a huge chain chemist, inscrutable office blocks, a pub or two – tumbleweeds waiting for the next boom. A smattering of restaurants, most so sprawling that even with customers they looked empty. Occasionally, sliding doors opened as I passed, cool air gushing out, and I detected activity inside. Perhaps Townsville was like the desert, I thought, the wildlife bunkering down in the day and emerging at night. The crime statistics suggest as much. Last year a spike in "youth" crime saw an extra 30 police deployed at night. The local inspector had urged the vigilante groups that patrolled the streets to disband. A petition was circulated, demanding a curfew for teenagers under 16. A cab driver told me about the constant car theft.
Life, according to Hill, would be breathed back into Townsville through two projects. During the federal election last year, the council lobbied for a new rugby league stadium. In the 2013 election it had been all about western Sydney; this time it was all about regional Queensland. Bill Shorten folded first, pledging $100 million. Turnbull followed suit, matching Labor's figure.
The second life-giving source was Adani. "We need Adani," Hill told me. "It's the next big thing."
Hill is pleased with the recent Adani announcement that Townsville will be the site of the mine's regional headquarters. It was hard won. Last year saw a bun-fight among mayors up and down the coast vying for a piece of the action. The Whitsunday regional mayor had in October been given the green light at a council meeting to "immediately contact Adani chiefs and offer a parcel of land" in Bowen, just south of Abbot Point. Further south, Rockhampton's mayor offered to build Adani its very own airport to the tune of $22 million. Countering this, the mayor of Mackay proposed providing Adani with the city's own, already existing, airport terminal.
The previous state government had offered $450 million to help Adani build its railway. During the 2015 Queensland election, the Labor opposition promised to protect the Great Barrier Reef and pledged to withdraw any state funding of Adani's railway. Queenslanders swung behind Labor and voted out Campbell Newman's Liberal Nationals. After six months in office, though, as Fairfax's Lisa Cox reported, the new state Labor government was considering alternatives to assist Adani, such as the previously mentioned "royalty holiday", proposed in defiance of its own treasury's advice that the Adani project was "unbankable" and inherently risky due to the company's opaque corporate structure and offshore entities, such as those in the Cayman Islands. A year later, the state threw the mine another lifeline, this time giving the Adani project "critical infrastructure" status, which in turn grants the government power to speed up assessments and block appeals.
How much more convincing does a boom need?
Well, in March this year, Premier Palaszczuk invited eight regional mayors to join her on a visit to India. The mayor of Gladstone, Matt Burnett, even overcame his fear of flying to go. There is a photo of them all wearing blue hard hats inside Adani's Mundra Port. Three weeks later, Prime Minister Turnbull met with Adani in New Delhi and assured the Indian businessman that native-title obstacles would be removed.
Now, sitting in the Townsville Council chambers, a huge modernist concrete building, Mayor Hill said, "We have offered to provide Adani with a temporary office while they look at real estate for their headquarters." It may have been the look on my face that did it, but Hill quickly added that Adani had declined the offer.
In New Delhi at the Global Natural Resources Conclave this year, Australian mining magnate Gina Rinehart stood on stage, clasping her book From Red Tape to Red Carpet and Then Some to her chest. The title, she explained, was borrowed from Prime Minister Modi, who once said, "No red tape, only red carpet, is my policy towards investors." Rinehart went on to congratulate India on its soaring success under Modi's guidance. Low inflation, vast foreign investment – "What an exciting country for entrepreneurs!" In Australia, however – Rinehart's tone became grave – it was a case of "the emperor fiddles while Rome burns". She wished it weren't so.
Rinehart then spoke about all the permits and approvals she needed to get for her Roy Hill project in Western Australia's Pilbara. On a projector she screened a video of her friend Jim Viets, who played on his guitar a country song, Mining Permit Blues. It's very good. So is red tape holding back Australia? Or is it holding back Rinehart?
Three years ago, when iron ore prices began to slump, Rinehart issued an alert: "red tape, approvals and burdens" had to be cut. Jobs and revenue were in peril. Australia, it seemed, was in peril. Somehow she'd conflated her fate with Australia's. She was yet to send off her first shipment of iron ore from Roy Hill, and the market had finally peaked and begun its descent. After a record stint of high prices, there was a glut, and her bargaining power was significantly reduced. Roy Hill had missed the boat. Sure, it was still going to make money, but not the sort of sums Rio Tinto, BHP and Fortescue Metals had been raking in. It was Australia's fault. All those permits.
But red tape is not merely an aspect of governance. It is a crisis point of two world views. Holding one view are those who see global warming as a profound threat and feel a responsibility to mitigate it. Within this is also a palpable sense of excitement about the opportunity this crisis may bring to reset global priorities so that profit is not centre stage. It is this latter notion that those holding the other world view fear. They do not feel threatened by climate change, but by the proposed solutions to it.
This is why so-called smack-downs on television programs such as the ABC's Q&A, the Punch and Judy show between the left and right, don't matter. It does not matter if Professor Brian Cox, the British physicist who is irrefutably better placed to judge climate science, tells One Nation's Senator Malcolm Roberts that global warming is real and human-caused. It does not matter because Roberts does not see the science; he sees a scenario in which all the Brian Coxes of the world are infinitely more powerful than all the Gina Rineharts. He sees a future in which a lauded Greens senator might say, "I told you so." And this is scarier than a planet with a fever.
So just how important is the mining industry to our economy? In February this year, economics journalist Ross Gittins asked this question in The Age. "Short answer: not nearly as much as it wants us to believe, and has conned our politicians into believing." The next question is: why? Here Gittins took a hit for the team: "Because people like me have spent so much time over the past decade and more banging on about the resources boom, we've probably left many people with an exaggerated impression of the sector's importance."
Couldn't have put it better myself.
Gittins went on to give the numbers: the mining sector accounts for 7 per cent of Australia's total production of goods and services (GDP) and employs 230,000 people, which is 2 per cent of Australia's workforce. Nothing to scoff at. If we imagined employment as a body, you could say mining is the hand. I like my hand. Yes, mining has a flow-on effect; but then again, so do I. Gittins points out that much of the profit and income generated by the mining sector goes offshore, which is fine, it's allowed – obviously. But that the mining sector is Australia's economic heart is less an argument than a pea-and-thimble trick.
Queensland is Australia's largest coal exporter. It has five working coal regions. There are 50 coalmines currently operating and a further 21, including in the Galilee Basin, in the pipeline. As well as the billions spent on coal-related infrastructure, there have been concessions made on water and electricity supplies and substandard bonds for mine rehabilitation. The government has also waved through three LNG (Liquefied Natural Gas) facilities on Curtis Island, in the Great Barrier Reef near Gladstone, and approved a rapid, at times shonky, rollout of coal-seam gas wells across the state, and unconventional gas projects, which ignite underground coal seams to generate gas, with sometimes tragic results. The revenue must be huge. But it isn't. Sometimes it's a good innings and sometimes it's a very bad innings. Last year, royalties came in at $1.59 billion, 3 per cent of the state's revenue. To compare, car registrations came in at $1.63 billion. But the state is expecting good things this year; politicians are hoping for around $3 billion. It still doesn't make sense – but it all adds up, and it has to keep adding up. Spending has been locked in, promises are made, factions are formed, donations are made.
"This is," thundered Prime Minister Tony Abbott in 2015, "a project that will create 10,000 jobs." Yes, even after Fahrer's evidence that figure this was a gross overestimate. He may as well have dug a hole and whispered his evidence into the ground.
This is an edited extract of Anna Krien's Quarterly Essay 65, The Long Goodbye: Coal, Coral and Australia's Climate Deadlock, out on Tuesday; quarterlyessay.com.