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Fresh trouble for Adani coalmining project? Australian Federal Court "questions" indigenous land use agreement

By A Representative
In a fresh trouble to India’s powerful Adani Group, the full bench of the Australian Federal Court has ruled in favour of applicants of the traditional Noongar people, who had challenged the Indigenous Land Use Agreement (ILUA), which had allowed the Adanis to go ahead with its $16 billion coalmining project in the country’s Carmichael region.
The Noogar applicants had challenged the ILUA, which the Adani claimed it had entered in with local people, seeking to exchange $1.3 billion in land, payments and benefits over 12 years in return for the Noongar people “extinguishing” native title rights on 200,000 ha in south-west Western Australia.
Taking note of the development, the American thinktank, Institute of Energy Economics and Financial Analysis (IEEFA), known to have questioned the financial viability of Adani’s ambitious coalmining project earlier, said, the ruling has again put in question the group’s ability to secure rights for its mine proposal.
In a statement, EIEFA said, “This new legal precedent could have major implications for the financing of the project”, insisting, “Consent of indigenous owners in Australia is critical to the proposed project proceeding and the securing of finance.”
The court agreed with five Noongar applicants, who argued that the deal was invalid because they had refused to sign on with other representatives. Four of the six agreements struck could not be legally registered, the court found, because the Native Title Act required “all” applicants to sign the ILUA.
“Financial closure for the Carmichael proposal has been deferred multiple times over the last six years since Adani Enterprises originally acquired the remote coal deposit in three tranches for a total of A$670m”, IEEFA noted.
Adani originally expected first coal by 2014, but in its December 2016 presentations the company said it had deferred the planned start of construction until the start of 2018 with first coal expected in 2020.
Suggesting that finances is going to be a major problem for Adanis, IEEFA said, global financial institutions like the Norwegian Sovereign Wealth Fund, Blackrock, Deutsche Bank, BNP Paribas, Société Générale and National Australia Bank have become even more wary of funding new coalmine projects.
Pointing out that they have all been “historically mainstay equity and debt investors for greenfield coalmine developments”, IEEFA said, “On January 31, 2017 Deutsche Bank amended its guidelines to entirely rule out any future project finance funding for greenfield thermal coal mines or coal fired power plant construction globally.”
It further said, the Adani project’s “strategic merits for India” which existed in 2010, “no longer hold”, as Indian Energy Minister Piyush Goyal had detailed the target to cease thermal coal imports this decade, and India’s draft National Electricity Plan released in December 2016 highlighting that no new coal fired power plants were required in the next decade.
Already, it said, “Coal imports into India declined at a record rate of 25% in the month of December 2016, an accelerating trend on the 6% annual decline evident over calendar year 2015 and again in 2016.”
In a related development, Wangan and Jagalingou (W&J) Traditional Owners’ Council has have written to Adani to withdraw its application to have an ILUA for its proposed Carmichael mine registered by the National Native Title Tribunal (NNTT), warning, “Should Adani refuse, a declaration will be sought in the Federal Court to have the ILUA struck out.” Letter here.

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