Australia throws spanner in GVK’s $6.4 bn coal mine project

Sydney: Indian infrastructure major GVK Group suffered a setback Tuesday with the Australian government halting work on the $6.4-billion Alpha coal mine project in Queensland till it gets a nod from the Federal Environment Department.

Alpha coal project got approval from the state government only last week.

Announcing the suspension, Environment Minister Tony Burke called Queensland’s approval process a “shambolic joke” even as the state’s Premier Cambell Newman criticised the decision.

Before the federal minister “stopped the clock” on the Indian conglomerate’s multi-billion mine, GVK management planned to start the construction work this year and send the first shipment to an Asian destination by 2015.

It could now take up to 18 months before the Department of Environment gives its decision on the project, owned jointly by the GVK Group and Hancock Prospecting, run by the world’s richest woman, Gina Rinehart.

The main concern for the department and environmentalists is the fact that the export shipments from GVK’s Alpha mine in the remote Galilee Basin would traverse the famous Great Barrier Reef.

“The coordinator-general’s report simply did not take into account the known habitats of dugongs, dolphins, turtles and whales in the area,” Burke said, criticizing Queensland’s approval to the project.

A request by Queensland’s newly elected Liberal government to make a decision in 30-day time-frame has been reportedly turned down by Minister Burke.

“I intend making a decision as soon as an informed decision can be made,” Burke told reporters Tuesday. “But I’m not going to be part of the shambolic operation that (Queensland Premier) Campbell Newman is daring to join up to.”

In what has been described as an “extraordinary attack” by the Australian media, the minister has threatened to suspend the bilateral agreement with Queensland.

“I want a streamlined approach. I don’t want a shambolic joke and that is what Queensland is wanting me to accept.”

It is anticipated that, if the environment minister carries out his threat, the proposed largest coal mine in Queensland could be delayed by over a year.

The Federal Environment Department officials would meet with the project’s main promoters, Indian energy conglomerate GVK, at the earliest to commence a federal approval process.

“It’s important we do the work that Campbell Newman could not be bothered doing,” Bruke said, adding: “We have had a week of ridiculous behaviour from the Newman government on environmental approvals.”

Many observers are seeing the ban in the backdrop of a raging debate on employment of foreign workers in Australian resources projects.

The Australian Immigration Department had recently given approval to GVK partner in the Alpha mine project and mining magnate Gina Rinehart to import 1,700 foreign workers for her iron ore project in Western Australia.

The trade unions have been demanding exclusive employment of Australian workers in the mines.

GVK vice chairman Sanjay Reddy had also added to the acerbic debate by saying that GVK-Hancock venture might use foreign labour in the construction process.

Meanwhile, as expected, the state Premier Cambell Newman has criticised the federal minister’s action.

“Minister Burke wants to shut the resources industry down in Queensland,” the Premier retorted.