Approval of Adani's Carmichael mine would clear the path for progress on other coal mine projects in Queensland's Galilee Basin, according to Queensland Resources Council chief executive Ian Macfarlane.
His statement comes amid suggestions that the withdrawal in March of a mining lease application for the large China Stone thermal coal project, for coal used in electricity generation, raises questions about the viability of other projects in the Galilee.
However, the Chinese-owned Macmines Australasia has confirmed that it remains committed to developing the mine in the short term, which means that its development would likely follow the Carmichael mine.
Queensland Premier Annastacia Palaszczuk said on Tuesday that the state government was taking action to ensure the $2 billion Carmichael coal mine approval is finalised, which has led to expectations it would be approved within weeks.
Mr Macfarlane said if the Carmichael mine went ahead, the precedential value of environmental approvals and expected investment in pit-to-port infrastructure would improve the business case for other Galilee coal projects.
"So all the management plans that Adani has put in place will be able to be replicated across the basin," Mr Macfarlane said.
"And in terms of infrastructure you'll have a rail line with capacity of up to 50 million tonnes [of coal], certainly 25 [million tonnes] initially that will take coal."
Adani intends to build a 200-kilometre rail spur to connect to the existing rail network in the adjacent Bowen Basin. The capacity of the rail line and adjoining networks should be sufficient to carry an additional 25 million tonnes of coal initially, and up to 50 million tonnes, Mr Macfarlane said.
Including China Stone, there are four other major projects proposed for the Galilee Basin. Kevin's Corner and Alpha are owned by GVK Hancock, a joint venture between Indian conglomerate GVK and Gina Rinehart's Hancock Prospecting. The two mines would produce 60 million tonnes of thermal coal.
The major other project is the North Alpha Project owned by Clive Palmer's Waratah Coal. According to the company's website, the project would produced 40 million tonnes per annum of thermal coal.
With asset lives that run well into the decades, there are questions about whether final investment decisions for thermal coal projects stack up. For example, for any mine with a 40-year life that enters production next year, decommissioning would not occur until 2060, when demand for coal is predicted to have shifted.
Former head of research for Citibank and now director of the Institute for Energy Economics & Financial Analysis, Tim Buckley, argues that new mines in the Galilee should not be developed and questions their viability.
He said that developing thermal coal mines in the Galilee posed a risk to mine owners because of changing demand for thermal coal, in contrast to coking coal used in steel-making, for which there are no alternatives.
"The Queensland government last week approved the Olive Downs, 15 million-tonnes-per-annum coking coal mine. This is a strategically sensible thing to do [because it is] best leveraging existing infrastructure and best using the limited carbon budget left," Mr Buckley said.
"To also concurrently open up a massive new low-quality thermal coal basin is strategically short sighted, and entirely out of step with the Paris Agreement."
News Source: Financial Review