Australia’s federal court on Wednesday overturned the government's environmental approval for the Adani Group to build one of the world’s biggest coal mines on scrubland facing the Great Barrier Reef in a major setback for the Indian conglomerate.
The Australian government said it could take between six to eight weeks for its environment minister to reconsider the approval of Queensland’s Carmichael coal mine that ecologists see as a threat to vulnerable species.
“With the consent of the parties, the Federal Court has formally set aside the approval of the Carmichael Coal Mine and Rail Project,” Australia's environment department said in a statement. “The department followed longstanding practice when preparing its advice to the minister about the project. On this basis, the minister made his decision after fully considering all of the department’s advice.”
The court ruled that the approval of the project was invalid because environment minister Greg Hunt had not fully assessed its impact on two threatened species: The yakka skink and the ornamental snake.
“This means that Adani no longer has federal approval for its mines. The state approval is also subject to a different court challenge. There has been a huge level of concern about the Adani mine here in Australia. Our court case, for example, was funded just by the Australian people making small donations,” Ellen Roberts of the Mackay Conservation Group, which challenged the environmental clearance in January, said over the phone from Australia. “Essentially, the decision now goes back to Greg Hunt.”
Apart from citing Adani’s ”poor environmental record”, activists have protested against the project’s impact on the Great Barrier Reef, one of the world's most biodiverse marine areas, because the coal would have to be shipped out of a nearby port, as well as the damage caused by climate change.
Roberts said the company, which has reportedly invested about $3 billion of a planned $10 billion in the project so far with the aim to produce as much as 60 million tonnes of coal annually for its power plants in India, “has been exaggerating” its economic benefits for Australia in terms of royalties and employment.
India is expected to overtake the US as the world’s second-biggest coal user in four years, with annual growth of 4.8% in its demand, according to an International Energy Agency report in December.
Supporters of the project say it is crucial for Prime Minister Narendra Modi to keep his promise to bring electricity to hundreds of millions of people presently living off the grid.
The court decision leaves Adani without legal authority to begin construction, which is yet to secure sufficient financial backing for the venture and recently slashed its workforce there.
In April, French banks BNP Paribas and Credit Agricole said they did not intend to provide financing for coal mining in the Galilee Basin, joining several other European banks that ruled out involvement on environmental grounds.
A dramatic drop in global coal prices to their lowest level in about eight years has also pegged back the likely returns from the proposed project.
Kelly O’Shanassy, chief executive of the Australian Conservation Foundation, said there had been two court cases, one done by the state of Queensland and one by the federal government.
“The decision today was based on just some of the problems that had been identified with the approval of the mine. The previous court case in Queensland identified a number of other issues that are problematic with the approval,” she said.
“If minister Hunt re-approves the Carmichael mine, I do not think that will be the end of challenges from the Australian community because there are other fundamental problems relating to some endangered black-throated finches. Also, evidence has come up that the mine would dry up critical springs and wetlands. These are not easy for the government to resolve,” she added.
Adani blamed the court ruling on a “technical legal error” by the federal department, while saying it was committed to ensuring its mine, rail and port projects in Queensland were developed and operated in accordance with Commonwealth and state laws and regulations, including strict environmental conditions.
“It is regrettable that a technical legal error from the Federal Environment Department has exposed the approval to an adverse decision,” said a statement on the company’s website. “It should be noted the approval did include appropriate conditions to manage the species protection of the yakka skink and ornamental snake. However, we have been advised that, because certain documents were not presented by the Department in finalising the approval, it created a technical legal vulnerability that is better to address now.”
Earlier an aboriginal group, Wangan and Jagalingou, also attempted to block Adani’s project and rejected the “Indigenous Land Use Agreement” with the company.
(With inputs from agencies)