News & Current Affairs
04 January 2015
by Kaye Lee
In 2011, as reported by Graham Readfern at Crikey, Gina Rinehart held a lunch at her house by the Swan River in Perth, at which West Australian Premier Colin Barnett, WA environment minister Bill Marmion and Chinese Ambassador Chen Yuming were in attendance to hear a presentation on climate change from the “sceptic” Professor Ian Plimer.
Plimer must have done well because, according to disclosures made to the Australians Securities and Investments Commission, Professor Plimer was appointed to the boards of Gina’s companies Roy Hill Holdings and Queensland Coal Investments on January 25 2012.
Dinner guest Environment Minister Bill Marmion’s chief of staff is Colin Edwardes, the husband of Cheryl Edwardes, who is the head of “external affairs, government relations and approvals” at Hancock Prospecting. Cheryl is also a former WA environment minister.
As PerthNow pointed out, Marmion was in the position of considering environmental approvals for Hancock Prospecting projects — of which there were four pending.
Let me just emphasise this. The WA environment minister’s chief of staff’s wife is employed by Gina Rinehart to secure government approval for her mining ventures.
And of course it doesn’t stop there.
Even considering the Coalition’s self-confessed penchant for doing business at weddings at the taxpayers’ expense, three senior members of the Coalition travelling all the way to India to a wedding of someone they have never met, at the behest of someone who was not related to the couple and whose own family says is an untrustworthy person motivated by greed, should have rung alarm bells far greater than the thousands the politicians subsequently claimed in “study” expenses for the jaunt.
At the time of inviting the politicians to the wedding, Mrs Rinehart was about to clinch a $1 billion coal deal with the bride’s grandfather – G.V. Krishna Reddy, the founder of GVK, one of India’s largest energy and infrastructure companies.
Three months after the politicians joined Mrs Rinehart at the Indian wedding the GVK conglomerate bought a majority stake in the billionaire’s ”Alpha” coalmine in Queensland’s Galilee Basin for $US1.26 billion.
When Barnaby Joyce decided to run against Tony Windsor for the seat of New England, Gina Rinehart contributed $50,000 directly to his campaign though some reports had the contribution at $700,000.
When Gina turned up to his election victory party, Barnaby said “Gina is a great friend and I’m a good mate of Gina’s and she’s got an Australian company which employs Australian people which pays tax in this nation and I’m so proud,” he said. “We need lots of Gina Rineharts, not one, [because] when we have a nation of lots of them we’re going to be a stronger nation.”
Barnaby Joyce hugged Gina Rinehart and told the waiting media he is proud to call her his “mate”.
“When we have someone like Gina, who is an Australian who actually is so different from other companies who are actually not Australian, then we should be proud of them [and] we shouldn’t kick them around,” he said.
“We should also be prepared to stand next to our mates because I’m a person who believes the Australian mateship quality is alive and well.”
And Gina stands by her man.
In November she flew to Canberra in her private jet to watch Barnaby’s inaugural speech in the House of Representatives which she viewed from the gallery as a “special guest”.
Some of Mrs Rinehart’s closest political friends, the Speaker Bronwyn Bishop and Liberal Party senators Cory Bernardi and Michaelia Cash, were invited to join the billionaire for an intimate gathering on the night before.
But getting back to the Alpha coalmine and the Indian connection…
A panel of independent scientific experts had raised concerns about groundwater, particularly the ability of Adani Group to model and monitor groundwater flows. In approving the mine, minister Hunt said he had accounted for the concerns
In April last year the Queensland Land Court, following a challenge by communities, said the Alpha mine should only proceed if the development meets further conditions on water use.
The court’s recommendations are not binding, and what happens next now rests with the Queensland government. In a statement, Acting Premier Jeff Seeney said: “We look forward to working with the project proponents to deliver jobs and economic benefits to Queenslanders.”
In all likelihood, the project will therefore get the go-ahead, subject to new conditions.
In September, the Mackay Conservation Group said the rail company Aurizon had walked away from an infrastructure plan it signed with GVK in 2013 that would see it build a 300km railway from proposed mines in the Galilee to port. The group said the deal was off the table after Aurizon failed to produce an Environmental Impact Statement for the project.
However it appears that, because the Queensland government has declared the area over which the rail lines will be built a State Development Area, it meant an EIS was no longer required to be submitted at this stage.
Aurizon said it welcomed this change in process as a positive for the “regulation of development of necessary infrastructure to service this important area”.
A spokesman from GVK also confirmed the company is firmly committed to finalising its JV proposal with Aurizon.
The deal means Aurizon will take a 51 per cent share in Hancock Coal Infrastructure, which houses GVK Hancock’s rail and port projects.
The open-access infrastructure will service GVK Hancock’s Alpha, Alpha West and Kevin’s Corner coal projects in the Galilee Basin.
“This proposed transaction will provide development certainty for the rail and port projects and de-risks the Alpha Coal Project from a logistics point of view,” the spokesman said.
“The transaction will also provide a pathway for sufficient equity and debt funding for the rail and port projects to reach financial close.”
In November, Queensland Premier Campbell Newman announced that in addition to the open-ended royalty holiday already on offer to the first mover in the Galilee Basin, the state government was willing to invest hundreds of millions of taxpayer dollars to fund the associated rail and port projects.
Mr Seeney said the funding for the project would come from the asset leasing project the government will institute should it win the next election.
A spokesman for Clive Palmer said “On one hand this government wants to sell assets and now they want to invest in helping one company.”
In December, GVK Hancock said it is focused on finalising approvals for its Alpha coal project in the Galilee Basin before looking to finance the $10 billion project. The comments came after French bank Societe Generale suspended its finance partnership with the project. Citing the project’s lengthy delays, the bank said it no longer had involvement in a financing deal.
But GVK Hancock said it did not require the bank’s services at this point in the project timeline.
“The key focus for our projects at this point in time is finalising our approvals and addressing litigious challenges to our attained approvals. Once we have finalised approvals we will then execute coal off-take agreements and work to finalise financing arrangements.”
Wall Street’s biggest banks are following the lead of UK and German financial institutions, and ruling out financing projects threatening Australia’s Great Barrier Reef. Three of the largest investment banks in the world – Citigroup, Goldman Sachs and JP Morgan Chase – have ruled out any investments in Queensland’s Abbot Point coal port. The news follows Deutsche Bank, Royal Bank of Scotland, HSBC and Barclays publicly ruling out investments in the coal port, leaving the Adani Group and GVK, who are seeking $26.5 billion to expand coal exports, dwindling options for finance. Australia’s ‘big four’ banks are now under pressure to join their US and EU counterparts.
Considering financiers, economists, and environmentalists are all questioning the viability of the project, it was somewhat surprising when, during Indian prime minister Narendra Modi’s maiden visit to Australia in November, Adani signed a MOU with the State Bank of India (SBI) for a $1 billion loan to fund the project in Queensland’s Galilee Basin.
Indian opposition MP Derek O’Brien raised the issue in the upper house of India’s parliament.
“Our understanding is these banks refused the loan, so our serious concern is why a $1 billion loan was given by SBI, knowing full well that these five banks have refused,” he said.
India’s coal minister said in October he hoped to stop imports of thermal coal within three years as domestic production stepped up.
“Two thirds of the produce of Carmichael will be imported back into India, so one of them is not talking the truth, speaking the truth. Because if India wants to reduce imports and two thirds of the capacity from the Australian mine is going to be imported back into India, it just doesn’t add up,” Mr O’Brien said.
Concerns have also been raised over prime minister Modi’s ties to Adani, the company behind the mine.
Over the past decade, Adani has prospered in the state of Gujurat, where Mr Modi was chief minister.
The company’s share price almost doubled as it became apparent Mr Modi would win the May election in a landslide.
Mr O’Brien said there were clear links between Mr Modi’s Hindu Bharatiya Janata Party and the Adani group.
“There is enough to suggest there is a cosy understanding and that is why this loan was approved, not taking into consideration the facts which were on the table,” Mr O’Brien said.
The company’s debt has risen substantially in recent years, much of it short-term debt.
Public interest lawyer Prashant Bhushan said recovering the loan may not be easy.
“When they can only recover it from the assets of Adani, but you see we don’t know. The total loans outstanding from the Adani group are in billions of dollars to various banks,” Mr Bhushan said.
Indian tweeters bemoaned Modi’s support for the Carmichael mine, calling it a repayment for billionaire friend, supporter and chairman of the Adani Group Gautam Adani, who accompanied Modi on his trip to Australia (and has apparently joined five of the PM’s six recent overseas jaunts).
It appears the coal barons have the governments caught in their web and we could well end up with a very expensive taxpayer funded railway to nowhere and the environmental consequences of dredging a port for a product that is no longer economically or environmentally viable to produce.