by Cheryl Adam
Karan is ardently, without stepping on toes, trying to harmonise his new approaches with those of the elders in the group, including his father’s. “The challenge is in merging of the thought processes,” he says. However, there is little evidence to support the claims in the newspaper article that Adani had attempted to address the issues facing the fishing community, or Adani’s claim to be ‘greening’ its ports which have 5000 trucks entering and exiting the Mundra port every day even with a rail link for cargo. And in outlining what changes his son Karan referred to in the newspaper article, there was no reference to any of the environmental degradation of the marine environment.
In March 2017, however, the majority of Australians still seem to live in ignorance about the Adani Group’s past in India and who exactly is this group, Australian politicians have been soliciting to our shore for nearly a decade.
On a churned-up field about five kilometres from the Adani power plant, we meet Valji Gadvi, a 42-year-old date farmer dressed in a white dhoti who has agreed to talk to us. Standing next to his John Deere tractor, he tells us about his experience. Close behind him the chimneys of the Adani power plant are visible against the horizon. His young son, smartly dressed in a blue shirt, sits on the tractor and smiles at us uncertainly. Gadvi also has four daughters and a wife. He has lived here all his life and as far back through the generations of his family as he can remember. I ask questions through the videographer: “What happened to your farm after Adani came to the area?”
“Before Adani I had a good crop,” he answers. “But now I don’t get the same produce. I used to grow cotton and castor oil. Earlier I would get about 1600 kilograms of cotton. Now it’s been reduced to half: 800 kilograms.”
Around 2008, he first noticed the reduction in the crop from the time the power plant started construction. Back then, he had a further ten acres of land and used to farm dates. He would make 4–5 lakh in rupees (AU$8,000–$10,000) from the crop.
“Now this has been reduced to zero because of pollution,” he says.
Fly ash and coal dust from the power plant meant he gave up on dates as a crop.
Soumya Dutta, one of the environmentalists from New Delhi, tells us that it is estimated that there has been a 50–60% reduction on the yield of dates since the power plants were built.
“So what does he do for income now?” I ask.
Gadvi says he has a few cows. He milks them and sells the milk. That is his main source of income. He tells us he visited the Adani company officials three or four times but nothing came of the meetings.
As he talks, he points to his son still sitting on the tractor telling us there has been a noticeable effect on his health. “My boy,” he explains, “is having breathing problems.”
The boy still smiles at us not reading our concern. Twenty minutes later as we leave the farm, Gadvi is already in the driver’s seat of the tractor. His son still sits beside him. The tractor lurches over the barren land dragging the loader behind it. He is getting on with his life as best as he can.
On our way back to the fishing village, we pass a herd of camels clustering around a tall spiky bush. They arch their necks to reach the highest branches. Even from afar, we can see the leaves are blackened by coal. Behind them, the chimneys of the Adani power plant loom large. Kutch is home to the Kharai camel, one of the rare camel species in India. These camels have the ability to swim through deep-sea waters that they need to do to survive the monsoons and they live on mangrove islands for a period of two to three months so they can access rainwater. There are around 2200 who feed on mangroves and other saline plants. They are the main source of livelihood of mainly Jat and Rabari communities in several villages, including Mundra. They have traditionally a small carbon footprint as they rotate the camels’ grazing and the pastoralists survive on camel milk and roti and live in temporary huts. But, increased salinity, due to the massive culling of mangroves, has greatly affected the camels’ lifespan.
A recent article in The Weather Channel notes: “Industries in Kutch – salt, thermal power, cement and shipyards, among others – pose a huge threat to the dwindling mangroves. Most of these industries require constructing jetties in the sea, which results in the cutting down of mangroves that are fodder for the Kharai camels. The increase in salinity throughout the region and the growth of industrial activities has minimised the availability of camel food and water sources.”132
As well as agriculturists and horticulturists, those dependent since time immemorial on animal husbandry have been badly affected by the industrial expansion. A total of 14 villages have already lost more than 1400 acres of grazing land to the SEZ according to the CEE report. In the early years after the Adani power plant was under construction and there were notices about their land being handed over to the SEZ, villagers threatened to bring 8000-odd cattle and buffalo into Mundra to block all of the roads unless the notices were withdrawn. The threats had no effect.
In one village I speak to a pastoralist sporting a red Kufi cap and a big white moustache who would rather not be named. The sad story is repeated. He too has lost grazing land. He talks about the amount of coal dust that has settled on plants, meaning the cattle go hungry. He tells me that he has uncovered a number of diseases in the cattle that he has not seen before.
The more time we spend in India, the more evidence we collect that Adani is a well-oiled machine: offering future jobs; allegedly seizing land and pedalling all sorts of promises to win the confidence of local people. What inevitably follows is sustained, irreparable environmental destruction without regard to the consequences. The main motive, it is abundantly clear, is to make a profit.
Adani’s expansion into the Australian coal industry aided by the pleas from our politicians at the Federal, State and Local level, has made Gautam Adani even bolder. In Mundra, the company actually financed its own 40-mile railway line, linking the Mundra port to the national railway network, as well as building a 1.1-mile-long private airstrip that SEZ tenants can use for chartered flights. Two Queensland local governments, the Townsville City Council and the Rockhampton Regional Council were going to jointly fund a AU$30 million airstrip for Adani for the Carmichael mine using ratepayers’ funds. The Councils would have never even owned the airstrip and it was hundreds of kilometres from both cities. The argument for funding the airstrip was that it would encourage fly-in fly-out (FIFO) workers, which is hardly delivering a result for those ratepayers who fund the project.
In January 2018, an ABC report noted that the Local Government Department had been asked to investigate the decision to fund the airstrip by the Crime and Corruption Commission (CCC) and whether or not the Council followed due process. In June 2018, in a surprise statement, Townsville Mayor Jenny Hill announced the $18.5 million earmarked for the airstrip would now go towards funding other projects in the city. She cited Adani’s failure to meet the Council’s June deadline to obtain financing and get on with the project. Rockhampton region’s Mayor, Margaret Strelow has declared she will not follow Hill’s lead.133 Hill was publicly critical of Adani in February saying they had to make sure “milestones are met and that is an issue for the company.”134
In 2018 it is now looking less likely, but only due to public outcry, that the Federal Government will provide a $1 billion taxpayer loan to build the rail line to link the Carmichael mine to the coast. What will happen with the airstrip remains unclear. But the fear, at the time of writing (June 2018), is that the Adani Company now has the funds to build the railway line themselves.
The group of concerned environmental activists, including scientists and journalists, meet up with us the day before we are due to leave New Delhi. They have been actively involved in the fight against coal mining in India. The meeting place is in an underground room in a suburban street. They have particularly targeted Adani and Tata. The Tata power plant, around two kilometres from the Adani power plant, was built after Adani’s. Several of the group of around 15 people tell us that they are bemused at the
proactive worship and red carpet treatment Australian politicians have shown Adani. It is clear these people are also deeply concerned about the catastrophic legacy, not only for Australia and the Great Barrier Reef, but for the rest of the world because of the huge carbon footprint which would be produced by the proposed Carmichael mine.
This group of environmental activists caution that they now have to be more careful ‘fighting Adani’ given his friendship with Prime Minister Modi. Around 2010 and 2011, they helped mobilise grassroot groups against the building of the Mundra power plant. They say they succeeded in the rejection of an application by Adani to expand its power plant in Mundra by arguing the application should be refused on environmental grounds. The group firstly identifies potential industrial polluters through environmental clearance applications as soon as companies apply through the Ministry of Environment, Forest and Climate Change.
“That is the earliest stage you can know that something is going on somewhere,” Soumya Dutta explains.
In India, there is real danger when villagers and farmers confront coal mining projects that involve land seizures. Source-Watch135 has compiled a list and map of people who have been killed, sometimes shot during protests by police, injured, arrested and one woman who set herself on fire after police had allegedly threated to bulldoze her home in November 2012 when she was protesting against the Katni power station in Madhya Pradesh. One of the protests listed involves the fishing community and salt pan workers protesting about Adani Power’s proposed 3300 MW power plant in Bhadreshwar village, a small village near Mundra. There are no official reports of people killed or injured during a protest against Adani.
The environmentalists talk about the coal situation in India and the role Adani plays in that landscape. India has the world’s fifth largest coal reserves, but the deposits are of very low quality relative to those found in other countries such as Australia (which has the fourth largest coal reserves)136 or South Africa. They also tell us imported coal is critical for anyone in the power game in India, as Adani has recognised. Adani, they say, has two or three different mines yet to open.
As of March 2017, they said Adani operated four power plants, with several more power plants planned in various states in India. Some were still at the application stage and others have been approved with land being cleared and ready to be built. The Adani Group has met with resistance, they say, as some of the mines are in forestry ‘no go’ areas. They have also experienced pressure from Indigenous groups.
Since we visited India, however, the times have certainly changed. With Adani Power in financial difficulty, reporting a US$227 million net loss for nine months to 31 December 2017,137 India is turning away from long-term thermal power purchase agreements because of the cheaper alternatives offered by renewable energy. Tim Buckley from IEFFA writes, in April 2018, that around 60 GW of thermal power projects in India are now under financial stress.
The Adani Group, however, is a chameleon, adept at game changing. The company now acts as the contractor in state-owned mines to remove the coal, we are told, bringing in their technology to carry out the mining and then selling the coal back to the State Government. From the largest coal importer in India, as the Adani Group notes on its website, it has gone on to be one of the largest coal miners. “It might be particular States such as Rajasthan or the State Electricity Board who buy the coal back from Adani,” Dutta explains.
However, all has not gone smoothly. We learn more about another reason, apart from a dependency on imported coal, as to why Adani is in such precarious financial circumstances. After a political decision in 2015 to double India’s coal production by 2020, and with private companies already invited to mine the coal, Coal India reached its highest production under its rapid coal expansion plan. Then the demand for coal fell dramatically. In August 2016, India exported coal for the first time to neighbouring Bangladesh.138
The demand for electricity and therefore coal is now growing at a much slower rate than anticipated, according to a report from India Energy Agency Coal 2017 Analysis and Forecasts to 2022.139 Private companies who have been involved in mining are “walking away from their projects even if it is at a cost.” The Coal Vision 2030 Study140 found that overall coal demand in India was estimated to be 900–1000 million tonnes per annum by 2020, and 1300–1900 million tonnes per annum by 2030 and that no new coal mines needed to be allocated beyond those in already in the pipeline.
Dutta claims that in 2016, 44 million tonnes of coal was “lying in our stockyards.” He said that India’s Central Electricity Authority report in 2017 stated that no more power plants were needed until 2027. Various media reports I later consulted confirm Coal India, which produces 82% of India’s coal and is the world’s largest coal company, was preparing to close 37 coal mines to be decommissioned by March 2018.141
“Because today India has installed power capacity which can generate electricity 316,000 MW and our peak power demand for this year 2016/17 is projected by the ministry to be 166,000 MW. You can clearly see even if we generated 65% of the entire capacity for the next six to seven years, we don’t need any more power plants,” Dutta explains. The other factor leading to the demise of power plants is that the Indian Government, under Modi, has firmly targeted building up to 275,000 MW of renewables by 2027 as a cheaper, local source of electricity, providing a major diversification away from coal fired power generation. India has pledged to generate 40% of the nation’s electricity from non-fossil sources by 2030.
This question has been puzzling me since we began our discussions.
Why is Adani forging ahead to pursue coal as a viable business if the government of India clearly prefers to facilitate a US$300–400 billion diversification into lower cost, more sustainable renewable energy? According to Dutta, Adani predicts that in the future coal power consumption may still rise. That, he says, is the gamble.
“Both the government and the industry are projecting a rise in demand for power. For power, the economy has to grow fast and that will generate more power demand. And the consumption of power has grown very, very fast. Now they are targeting 2030. Not today’s demand.”
On top of these issues, India will always need higher quality coal to blend with its own coal. Imported coal is used for blending with Indian coal. Coal is graded according to the carbon content.
“You can’t just replace coal with Indian coal,” the environmentalist said. “Now they are experimenting with blending – 20% of Indian thermal coal, 80% of imported coal.”
India’s Minister of Railways, Coal and Finance, Piyush Goyal admits that India will be forced to keep importing coal but they will only bring in as much coal as was needed. Goyal has stated many times that he wants coal imports to be phased out.142 Modi has also promised to provide power to every Indian citizen by 2019.143 Coal could power up to 100 million homes in India. Goyal himself is an advocate of renewable power although admitting coal will “be the bedrock for some time.”
Adani has made much of being the saviour by importing Australian coal as a motive for alleviating poverty in India. As it states on its website, at various times, the company has promised to support electrification projects that will lift 100 million Indians out of poverty. But during our trip to India, the environmentalists we met in New Delhi and others told us that the Carmichael coal, which was to begin production in 2020–21, might be destined for the export market rather than providing electricity to India. In other words, the motive is profit not welfare. More than a year later, Adani’s motivation for getting its hands on Australian coal has become clearer.
Coal prices, particularly from countries like Indonesia, went up from US$36 to $40 a tonne, then to US$90 and to well over $100 a tonne for Australian coal, says Dutta. The Mundra power plant relies on imported coal for the vast majority of its fuel requirement. Six months after our visit to India, in September 2017, the Adani group reportedly144 transferred the Mundra power plant to Adani Power for Rs 106 crore after apparently investing Rs
600 crore in the project. By 2017, Adani’s Mundra power plant is AU$9.77 billion in debt – half of the debt of Adani Power.
This dramatic change in the fortunes of the Mundra power plant was triggered by the Indian Supreme Court rejecting the Adani and Tata bid for a compensatory tariff to counter the increased prices of imported coal. Since then, both companies have been actively looking for other markets who are willing to bear paying higher costs of expensive imported coal to create the electricity.
Back in March 2017, Dutta told us that the Adani Group had been planning to export the Carmichael coal to eastern India near the border of Bangladesh where a 1320 MW power plant was proposed to be built in the Indian state of Jharkhand. It was an Indian investment and Indian technology, Dutta said. Adani also, they told us, planned to export to Nepal. A power plant, Dutta explained, takes four years to build and is expensive and lasts around 40 years. Just as Dutta and his associates had forecast, before it was announced in Australia, in April 2018 Adani proposed the Godda Power Project in Bangladesh as a new market for the Carmichael coal following the challenges faced by the Mundra power plant due to increased imported coal prices.
Tim Buckley from IEFFA claims in a report entitled ‘Adani Godda Power Project Too Expensive, Too Late, and Too Risky for Bangladesh’145 that the project was “being promoted at least in part by Adani to justify its struggling Carmichael coal project in Australia.” As mentioned earlier, Buckley has described the proposed Carmichael coal mine as a ‘stranded asset’, stating that the proposed mine has cost Adani Enterprises $AU1.4 billion over the past eight years. Tim Buckley told me that there were several reasons for this including the isolated location with investment requiring roads, rail, airports, water and power infrastructure making it a high capital cost.