Malcolm Turnbull should rule out Adani subsidy
Melbourne, Tuesday 29 March 2016
Financial activist group Market Forces is calling on the Turnbull Government to clarify whether Australia’s sovereign wealth fund – the Future Fund – will be used to subsidise the controversial Adani mega-mine in the Galilee Basin.
The call follows Indian media reports that Indian Finance Minister Arun Jaitley will ‘likely push for easy funding from the Australian Government and Future Fund Chair Peter Costello during his visit to Australia this week.
“Over a dozen banks worldwide have either backed away from the environmentally disastrous Carmichael mega coal mine, ruled out funding for it, or dismissed it as financially unviable”, said Market Forces Executive Director Julien Vincent.
“The arrogance of Adani treating Australia’s sovereign wealth fund as a backstop to finance their otherwise unbankable coal mine is staggering.”
“The Turnbull Government has spent the past week differentiating itself from Tony Abbott, talking up innovation to transition Australia from an ailing mining industry. Does Prime Minister Turnbull really want to take a proposal to the election that Australian taxpayers subsidise a controversial mine labelled ‘unlikely to stack up’ by the Queensland Treasury and which would result in shipping coal through an already-bleaching Great Barrier Reef?”
A study released by Market Forces last month found that fifteen major retail, industry and public sector fund options have lost an estimated $5.6 billion – or up to $3024 per member – on fossil fuel company investments since the start of 2014. Analysis from November 2015 revealed the Future Fund had lost $1.5 billion over the previous three years from fossil fuel investments.
Meanwhile, conditions continue to further deteriorate for the thermal coal market.
Last week Deutsche Bank published its commodities review with a section titled ‘Thermal Coal: Surpluses are here to stay,’ forecasting a more than 50% decline in Indian coal exports between 2015-18 and in February, Axis Capital reported that even Adani Enterprises management “mentioned that further investments in its Australian coalmine project shall be dependent on visibility of revival in global coal prices.”
“It’s simple,” said Vincent. “Australia’s sovereign wealth fund is supposed to be about investing in Australia’s future. Coal has already been consigned to the past.”
Finance Minister Arun Jaitley will meet with Ministers at a private all day gathering in Sydney on Wednesday to promote Australian investment in the “Make in India” campaign. Adani Mining Australia CEO Jeyakumar Janakaraj is one of the speakers at the mining session. Minister Jaitley is scheduled to meet Peter Costello on April 1 according to reports.