With coal going begging, it’s time to stop digging

Instead of splashing billions of dollars building their coal mines from scratch, instead of enticing governments with fees Screen-Shot-2015-06-30-at-1.57.54-pmand illusion of jobs, instead of battling bitter local communities and tearing up farmland, you have to wonder whether Shenhua and Adani have thought of simply buying one on the cheap – a coal mine that is.
…particularly Peabody, which reported this week a $US1 billion loss for June quarter. At $US5.8 billion, its debts tower over its sharemarket value of just $US350 million, and it has mostly unfunded mine rehabilitation liabilities of $US2.5 billion. Alas Adani and Shenhua are determined to do things the hard way…As it staves off oblivion, Peabody would surely countenance an offer by Shenhua for one of its Hunter Valley assets, replete with existing port and rail infrastructure, all requisite approvals and an established workforce.
In any event, economic case for digging through the water table on theLiverpool Plains hardly stacks up. Shenhua forked out an astronomical $300 million to the NSW government to get its exploration licence, another $213 million on land purchases and, with another $200 million due for a mining licence, reckons the project will owe it a cool $1 billion before it loads its first truck with coal. In light of falling demand for coal globally the NSW government could help Shenhua save face by declining a mining licence and handing back its $300 million and potential for adverse court case in the event that TPP(Trans Pacific Partnership) trade deal – with its mechanisms for companies to sue governments – is signed by the Australian government. Per graph, world outlook for coal is steady decline in demand.

>more> TheAge

About groundswellbasscoast

This is on behalf of local climate change group. Material is selected by Bernie McComb and does not necessarily represent opinion of whole group.
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