Adani Australia’s mining chief executive has suggested the company could seek “sizeable compensation” – potentially billions of dollars – from the Queensland government if its mining leases are cancelled.
A state parliamentary committee is hearing evidence in relation to a private member’s bill, tabled by the Greens MP Michael Berkman, to ban coalmining in the Galilee Basin.
Much of the hearing on Monday morning focused on the potential legal implications of the legislation, which would have the effect of terminating several previously approved mining leases and exploration permits in the untapped resource basin.
The bill is unlikely to pass, but the committee hearing has revealed what would be at stake if Adani’s Carmichael coalmine ends up in the courts.
The Adani Australia mining chief executive, Lucas Dow, told the committee the company had spent “$1.4bn to date” on the Carmichael mine and associated rail plans.
“Clearly there would be a legal recourse to this, not only to the cost incurred but also the future profits that would have been forgone as well. So that would be a sizeable compensation,” he said.
Adani’s public statements in recent months have criticised the Palaszczuk government for “shifting the goalposts” on the approval process for outstanding environmental management plans. State ministers have been cautious with their own comments about Adani, wary that the government could pursued for compensation if Carmichael does not proceed.
A leaked legal strategy document obtained by the ABC last month, prepared by a law firm Adani subsequently hired to conduct commercial litigation, suggested the company should use “use the legal system to pressure decision makers”.
Dow said the Carmichael mine would create 1,500 direct jobs “during ramp-up and construction”, but he equivocated when asked how many jobs would be created once the mine was operational. He said there were no plans to automate mine production.
“Similar-sized mines see employment workforces between 1,000 to 2,000 employees,” Dow said.
“If the coal is not sourced from the Galilee Basin, it will be sourced from elsewhere. This bill also seeks to cut across existing legal rights, and obviously will create sovereign risk and create questions around the investability of Queensland.”
The hearing has heard the Queensland parliament has the power to legislate to revoke mining leases, and has previously done so on three occasions.
Earlier on Monday the committee heard from the Australian Marine Conservation Society, the Environmental Defenders Office Queensland and the Climate Council. Each supported moves to prevent coalmining in the Galilee.
“The Queensland government cannot be talking about protecting the Great Barrier Reef and also talking about opening up massive new coal basins. They’re not compatible any more,” said Sean Ryan, the principal solicitor at the EDO.
Queensland Treasury officials told the hearing Adani had not yet signed a royalties deal with the state. They said the state’s budget process had not factored in any future royalties from the Galilee Basin.
