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 Environment and Conservation Issues facing the natural world

#21
18th April 2017, 11:22 PM
 pipbarber AFA Member Join Date: Aug 2015 Location: Melbourne Posts: 2,764
Re: Adani's Coal Extraction Nightmare

Quote:
 Stub King said actually the govt could not say for sure which Adani entity would get the load.
Well yes, just give the cash to some subsidiary entity that is squeeky clean, but it may not be that simple. The loan and project is relatively high profile, not something that can be slipped under the back door I would have thought.
#22
20th April 2017, 12:04 PM
 WesternGeo AFA Member Join Date: Jul 2015 Location: Perth, WA Posts: 573
Re: Adani's Coal Extraction Nightmare

Quote:
 pipbarber said Anyhow, 7% is a pretty big slice of pie but...well, it's not that big! Factor in the environmental cost of mining and I wonder to myself...why the fuck are we even still doing it? We need to slowly phase the industry into obselescence don't we? It's not that vital. We living on one of the sunniest continents on the planet, don't you think we could maybe take the lead in solar technology? It just makes no sense.
Although I agree in principle with your sentiment in regards to coal mining, most other mining is essential to our modern societies and Australia is a big player.

For example:
• Iron Ore - Australia 25% of world output
• Nickel - Australia 9% of world output
• Aluminium - Australia 29% of world output
• Copper - Australia 5th largest producer
• Gold - Australia 10% of world output
• Silver - Australia 6% of world output
• Zinc - Australia 12% of world output
• REE - Australia 8% of world output

Mining has and will continue to be a major part of the Australian economy. I look at it as an opportunity to make sure that this essential human industry is done in a way with the most minimal impact on the environment, rather than letting miners run loose under less regulated jurisdictions.

From my experience in the industry we have had mixed success in Australia, some projects are planned looking at the whole life of the mine and include rehabilitation costs factored into the project. Others are merely out to dig up as much as possible, make a quick profit, then go broke, leaving the environmental responsibilities in limbo. It is up to our regulators (and legislators) to stamp this out, but it will mean some marginal projects do not go ahead due to increased costs.
#23
20th April 2017, 12:46 PM
 Darwinsbulldog AFA Member Join Date: Jan 2009 Location: Perth Posts: 18,293
Re: Adani's Coal Extraction Nightmare

Quote:
 WesternGeo said Although I agree in principle with your sentiment in regards to coal mining, most other mining is essential to our modern societies and Australia is a big player. For example: Iron Ore - Australia 25% of world output Nickel - Australia 9% of world output Aluminium - Australia 29% of world output Copper - Australia 5th largest producer Gold - Australia 10% of world output Silver - Australia 6% of world output Zinc - Australia 12% of world output REE - Australia 8% of world output Mining has and will continue to be a major part of the Australian economy. I look at it as an opportunity to make sure that this essential human industry is done in a way with the most minimal impact on the environment, rather than letting miners run loose under less regulated jurisdictions. From my experience in the industry we have had mixed success in Australia, some projects are planned looking at the whole life of the mine and include rehabilitation costs factored into the project. Others are merely out to dig up as much as possible, make a quick profit, then go broke, leaving the environmental responsibilities in limbo. It is up to our regulators (and legislators) to stamp this out, but it will mean some marginal projects do not go ahead due to increased costs.
For the most part, these commodities [and including energy, fossil fuels] have been under-taxed, and often subsidised directly or indirectly. And for the most part primary industries like mining, farming, have been exported without much in the way of value-adding.
Despite massive exports of all types, we have little to show for it. The Australian people, and especially, the indigenous sector, has had, at best, only crumbs. And most of the profits have gone to under-taxed, and off-shore, corporations.

The stupidity and short-sightedness is tantamount to treason against the Australian people.
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#24
21st April 2017, 05:39 PM
 Stub King Take my advice, don't listen to me Join Date: Jun 2015 Location: Melbourne Posts: 826
Re: Adani's Coal Extraction Nightmare

Quote:
 Darwinsbulldog said For the most part, these commodities [and including energy, fossil fuels] have been under-taxed, and often subsidised directly or indirectly.
100% agree

Quote:
 And for the most part primary industries like mining, farming, have been exported without much in the way of value-adding.
that's why they are called 'primary' industries . Exporting finished products would have priced us our of the market because of our high labour costs.

Quote:
 Despite massive exports of all types, we have little to show for it. The Australian people, and especially, the indigenous sector, has had, at best, only crumbs. And most of the profits have gone to under-taxed, and off-shore, corporations.
here I disagree. While what you sat towards the end is true, the Australian economy has benefited enormously. One of the reasons we did so well in the GFC and still are doing well comparatively is because certain growing economies still want what we have in the ground.

But ... we could have had more, and what's worse, we squandered an opportunity to use the boom to fund forward looking strategic programs like NBN, education (anyone seen the latest OECD PISA report?), R&D (e.g. renewables)

Quote:
 The stupidity and short-sightedness is tantamount to treason against the Australian people.
we have to bear some of the responsibility here. we keep voting the fuckers in.
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Last edited by Stub King; 21st April 2017 at 05:41 PM.
#25
23rd April 2017, 02:45 PM
 Darwinsbulldog AFA Member Join Date: Jan 2009 Location: Perth Posts: 18,293
Re: Adani's Coal Extraction Nightmare

Stub King wrote:-

Quote:
 that's why they are called 'primary' industries . Exporting finished products would have priced us our of the market because of our high labour costs.
I am not saying we should never export anything but value-add. Primary exports are an important part of our economy. But there is no good reason to be dumb, greedy or short-sighted about it. Especially when we have had continual and long experience of having recessions as soon as markets for primary products/minging commodities goes off the boil!

High labour costs are almost always a fallacy. It is apologetics for laziness, self-interest, or stupidity. There are usually many inputs for goods and services, and labour costs are just part of that.

All you need for profit is for marginal revenue to exceed marginal costs. If the margin is narrow, you go for bulk and economies of scale. Labour costs can be minimised by automation and productivity planning, reducing inefficiencies, realistic flow charts of production, etc.

Salaries/wages can be reasonably high, and industry/business still remain profitable.

That said, under-regulation or over-regulation of markets can both be fatal. One thing that should be banned world-wide is futures trading, or short-selling.

The other thing is proper taxation. No tax havens, and no "accounting tricks" that allow transnationals the power to produce "local" "losses" and hence gain tax relief.

Megacorporations not paying tax is the real reason why smaller corporations and wage earners are paying more tax than they should. This puts pressure on wages, and makes corporations put pressure on government to reduce their taxes, or give subsidies to business.

In other words, everyone, from wage earners to most corporations should be on the same page, and pressure governments everywhere to get them to force mega-transnationals to pay their fair share of tax. It isn't really a "left" or "right" issue. It is just sane public policy, and something that should be discussed in G20 or other international economic forums. Because almost everyone is getting screwed- governments, businesses and ordinary people.

Transnationals have become quasi-states, are anti-competition, anti-innovation, anti-democratic, and anti-business. They usurp the sovereignty and rights of all other players: governments, business and people.

This was realised at least as far back as the nineteenth century. People found out just how bad transnationals like the British East India Company could behave. As a consequence, the power and influence of the EIC was curtailed and eventually the company was dissolved by act of parliament.
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#26
23rd April 2017, 05:28 PM
 bruce1937 AFA Member Join Date: Aug 2010 Location: Kilmore Posts: 2,614
Re: Adani's Coal Extraction Nightmare

On a side note, I have heard that England no longer has any coal fired power generation.
Well done to them. You would have to be short sighted in the extreme to consider establishing a new coal mine.
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#27
23rd April 2017, 07:37 PM
 Darwinsbulldog AFA Member Join Date: Jan 2009 Location: Perth Posts: 18,293
Re: Adani's Coal Extraction Nightmare

Quote:
 bruce1937 said On a side note, I have heard that England no longer has any coal fired power generation. Well done to them. You would have to be short sighted in the extreme to consider establishing a new coal mine.
Dey got some nuke power plants though. A terrorist's dream. Luckily they have a reasonable sized army to guard them, though I imagine it contracted out to security firms.
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#28
23rd April 2017, 09:31 PM
 pipbarber AFA Member Join Date: Aug 2015 Location: Melbourne Posts: 2,764
Re: Adani's Coal Extraction Nightmare

We obviously can't just stop burning coal overnight, it needs to be, and is being, phased out. I think the important issue regarding the Adani project is not the underlying use of coal, although it is a part of a broader problem, it is the profound environmental damage the project will create along with the lack of clear economic benefit the project will deliver to the nation broadly.

I reckon this is a case of confining the issue to the immediate circumstances and restraining extrapolation into the broader global issue of AGW. Even if there was no problem with global warming, this is still a bad project.

People who dont care about climate change still care about the reef, not to mention fishing. Farmers who vote for one nation still need their water sources. Towns that love the National party dont want their rooftops covered with the black soot from passing freight trains. You dont have to be all in to oppose this project.

Not sure where i'm going here, just thinking out loud.
#29
25th April 2017, 11:14 AM
 wolty This space for rent Super Moderator Join Date: Jul 2009 Location: Brisbane Posts: 24,173
Re: Adani's Coal Extraction Nightmare

Adani coalmine at heightened risk of becoming a stranded asset, report says

Not that I think the government will listen but I also think we have turned a corner with regards probity, there really is nowhere for bad decisions to hide anymore.

Quote:
 Carmichael project likely to be ‘cash flow negative’ for most of its operating life, according to Institute for Energy Economics and Financial Analysis The risk of the controversial Adani Carmichael coalmine becoming a stranded asset has increased in the last 12 months, according to a new report. The Institute for Energy Economics and Financial Analysis (IEEFA), says the Carmichael project is likely to be “cash flow negative” for the majority its operating life, even with concessional loans. The IEEFA’s new report, Adani’s Remote Prospects, warns Adani Enterprises is not in a strong financial position. It has thrown into doubt the wisdom of lending the project $1bn worth of taxpayers’ dollar through the Northern Australia Infrastructure Facility (NAIF). It comes a week after John Hewson, a former Liberal party leader, warned the Carmichael coalmine was already a “stranded asset” and the last thing the Turnbull government should be doing is lending Adani$1bn. The report, released on Tuesday, shows Adani Enterprise Ltd’s equity market capitalisation has declined from over US$10bn in 2015 to US$1.9bn, while its net debt has grown to US$2.5bn. Adani Enterprises Ltd owns the Carmichael coal project via its Australian subsidiary Adani Mining Pty Ltd. It shows Adani Mining has current debt of US$1.1bn secured against shareholders’ equity of a negative A$236m, with the company only remaining solvent due to the ongoing annual support of its Indian parent entity. “[Which is] a serious financial risk for any existing or prospective external creditor or supplier,” the report warns. The report also shows the leveraged nature of Adani Enterprises is mirrored across the whole Adani Group. Since early 2015, it says the Adani group has seen estimated net indebtedness rise by US$3bn to US$15.9bn. The report argues that, beyond the estimated A$1.4bn already sunk in the Carmichael coalmine project, the project may require a further A\$5.3bn of investment to get the project operating, and Adani Enterprise will struggle to contribute equity to the project. “The project risks over-stretching the balance sheet of Adani Enterprises to an extreme degree, creating a high level of financial risk to both shareholders and potential financiers,” the report warns. Tim Buckley, the director of energy research at IEEFA, a former top-rated equities analyst at Citigroup, said the Carmichael project had the fundamentals of a “feckless entrepreneurial scheme equivalent to those last seen in Australia in the 1980’s”. “Absent massive taxpayer subsidies, no independent investor would give the proposal a second glance given its strategic and financial predicament, particularly set against a rapidly declining market for seaborne thermal coal,” Buckley said. “Adani took a calculated business risk on this speculative project in 2010 but the world has changed. “No longer strategically aligned nor financially robust, today it is less a gamble, more a shot in the dark,” he said.
It didn't start out that way but the delaying tactics hopefully will win in the end.
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#30
25th April 2017, 03:20 PM
 Stub King Take my advice, don't listen to me Join Date: Jun 2015 Location: Melbourne Posts: 826
Re: Adani's Coal Extraction Nightmare

Quote:
 Darwinsbulldog said Stub King wrote:- High labour costs are almost always a fallacy. It is apologetics for laziness, self-interest, or stupidity. There are usually many inputs for goods and services, and labour costs are just part of that. All you need for profit is for marginal revenue to exceed marginal costs. If the margin is narrow, you go for bulk and economies of scale. Labour costs can be minimised by automation and productivity planning, reducing inefficiencies, realistic flow charts of production, etc. Salaries/wages can be reasonably high, and industry/business still remain profitable.
partially agree. they are not always a fallacy because if they were, industries would not relocate. you have to look at your comparative advantage. for industries where simple manpower (i.e. manual or semi automated labour) is a significant input, we are at a disadvantage. manufacturing, textile, electronics assembly, abattoirs, call centers and so on. here we are either too expensive or jobs can be automated. so for commodities, the marginal revenue is small, competition is tough and there is a pressure on prices. if the labour component is significant, we are priced out of the market. this is also the case for products aimed at markets where they cannot command a high price (e.g. meat to Indonesia).

where 'brain power' is a major source of input, or when full automation is an option, we have (sometimes) an advantage. also for industries that mainly cater for domestic markets where high labour costs are offset by high wages (they are two sides of same coin) or for products which can command a premium price (e.g. a resource only we have, financial services, high tech, something going to a rich country like beef to China) cost of labour is less of an issue.

you are right in pointing out labour is but one component. but this works to our detriment. if you consider the entire supply chain needed to produce something, you have the cost of regulation, taxes, machinery (much of which is imported), real estate, etc.

So we have to pick and choose. choosing whether to export steel rather than iron ore, packaged meat rather than livestock or drills rather than tungsten, will depend on many factors. but on the whole, we are an expensive country to 'make' things.

I do agree with you however that on the whole we have chosen the 'dumb' option. there is no reason why there could not have been an Australia Samsung, or Apple, or Bayer or DuPont or GSK.
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