Adani no go would be bitter blow to Townsville

Townsville Mayor Jenny Hill is one of the strongest advocates for the Adani mega mine, and she must now be very worried that the mine will not proceed, and that Townsville will miss out on the mine HQ, FIFO jobs, and contracts for local businesses. Townsville has certainly been doing it tough economically in recent times, and it is desperate for the new jobs the mega mine would create, directly and indirectly (e.g. see my post Why the Adani mega mine is welcome news in Townsville). Over the last decade, the number of employed persons in the Townsville region fell by around 6,000, according to figures published by Pete Faulkner in an interesting recent post, in which he notes:

“The downturn in the Townsville economy has clearly been broad-based and impacted a large majority of industry sectors with a total loss of almost 6,000 jobs over the decade.”

If it were not for strong growth in public administration & safety and the health care & social assistance industries, i.e. in jobs largely funded by the public sector, Townsville’s economy would be in a far worse state (see Pete’s chart reproduced below).

Townsville_employment_PF

So it is no wonder that the Adani mega mine is seen as so critical, and why the news of recent days is so disappointing for so many in the region.

Further reading on the recent news regarding the Adani mega mine include thought-provoking posts by John Quiggin and Nick Behrens:

Adani outmanoeuvres Palaszczuk

Why Adani must not be given a $320 million ‘royalty holiday’

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5 Responses to Adani no go would be bitter blow to Townsville

  1. Glen says:

    I thought former premier Peter Beattie summed it up well on Sky news today. He said this type of deal was commonplace in Qld for decades in regards to royalties, he had been part of them himself during his time. Many royalty deals are backended and the overall amount paid over the life of the mine was the same, so he was in full support of the arrangement. In regards to Townsville I think it’s a bit rich for the Mayor to be bleating about job losses, hundreds of millions of dollars of projects are currently on hold or cancelled altogether directly due to decisions made by the council here, further to this the Mayor has just overseen almost 200 jobs go at Townsville City Council in the last few months alone, so whilst it is disappointing if Adani doesn’t proceed, the fact that thousands of other jobs have been lost that are far greater in number than Adani should be more of a concern.

    • Gene Tunny says:

      Thanks for the comment Glen. Yes, Beattie has a point but it’s difficult to figure out exactly what was offered to Adani and the extent of the subsidy provided by the royalties holiday. I’m not totally against a royalties holiday, but I want to make sure Queensland gets fair compensation for the exploitation of its resources.

      Good point about job losses at Townsville City Council, which must be related to the Council’s financial situation which would itself be affected by local economic conditions. I’ll investigate further. Thanks.

  2. White Elephant says:

    Hey Gene has anybody actually seen a bankable feasibility study for this project?
    I cant believe the amount of political capital and potentially taxpayer money being burnt here with an understanding of the economics of the project.
    I have no problem with the project happening – but last I looked at these assets under previous ownership – there was no way in hell the project was bankable at current thermal prices, let alone forecast ones.
    If the thing isnt bankable – why are governments even talking about it?

    • Gene Tunny says:

      Apparently there was an undisclosed bankable feasibility study prepared a few years ago (see reference to it in this report: envlaw.com.au/wp-content/uploads/carmichael43A.pdf), but the economics of the project have very likely changed since then. it is certainly concerning that the viability of the project appears to depend so heavily on concessional loans and a royalties holiday. Thanks for the comment White Elephant.

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