Quotes of the Week

If you want to build a new coal plant you have to think about what is going to happen to electricity prices over the next 20 or 30 years, because that is the time frame that you have to sell over to make back the cost of building the plant. The reality is that renewables and storage is going to be much cheaper than coal in far less than 20 years, so anyone building a coal plant today is never going to make back their money. [Senior economist at The Australia Institute Matt Grudnoff writing in The Guardian, 14 June 2017]

“Keep him away from Twitter, dear God, keep him away from Twitter”  [anonymous quote alleged to come from White House sraffer concerning US President Donald J. Trump]

“Advisers to the President describe Mr Trump as increasingly angry over the investigation, yelling at television sets carrying coverage and insisting he is the target of a conspiracy.” [ABC News, 18 June 2017]

"At what point does America get demeaned? At what point do they start laughing at us, as a country?" [President Donald J. Trump, 1 June 2017]

The Fools on the Hill still vainly searching for viable large scale 'clean coal' technology

The Sydney Morning Herald reported on 30 May 2017:

Environment and Energy Minister Josh Frydenberg said the Clean Energy Finance Corporation [CEFC] would have its mandate expanded so it could back fossil fuel power plants that include the technology, sometimes described as "clean coal".

The technology, which involves capturing the emissions at the source and burying them underground, was explicitly banned when the CEFC was set up under a Labor-Greens agreement in 2011.

Unfortunately for the foolish, ideology-driven Liberal MP for Kooyong & Minister for Environment and Energy and his equally foolish Prime Minister The Australia Institute released this statement on the same day:

“The Australian Government has put $1.3 billion of taxpayers’ money towards Carbon Capture and Storage (CCS) initiatives since 2003, with zero large scale operational projects to show for it. A new report from The Australia Institute’s, Money for nothing, has found that despite years of generous taxpayer funding, there are no large-scale CCS projects operating in Australia and no planned coal CCS projects at any stage of development. Several proposed coal plants with CCS received federal grants, but all have since been cancelled or liquidated.” 

Opening paragraphs of The Australia Institute’s discussion paper Money for nothing by Bill Browne and Tom Swann, May 2017:

In 2007, then-Environment Minister Malcolm Turnbull announced a $100 million grant for a proposed coal plant at Loy Yang “suitable for” CCS. Turnbull said “Projects like this one … will play an integral role in helping to reduce emissions in Australia”.  Five years later, the grant was withdrawn. The operator has been liquidated.

In February 2017, Prime Minister Malcolm Turnbull put CCS back on the agenda. He argued as the world’s largest coal exporter, Australia has a “vested interest” in promoting clean coal, and lamented that despite substantial public investment over the years “we do not have one modern high-efficiency low-emissions coal-fired power station, let alone one with carbon capture and storage”.

 In 2009, the head of the Australian Coal Association promised that that we will “have commercial scale demonstration plants with carbon capture and storage in operation in Australia by 2015”.  In 2017 the chief national coal lobbyist said it is “pretty early days” with regards to CCS, which is “an evolving technology”.

 Despite the poor track record of coal with CCS, the Turnbull government is now proposing to fund it through the Clean Energy Finance Corporation, which has previously focused on commercial or near-commercial projects, mostly renewables.

In light of Turnbull’s proposal, this report outlines previous funding to CCS and how little Australia has to show for it.

Since 2003, successive Australian governments have backed their promises that CCS will preserve the coal industry with promises of public money. Over $3.5 billion has been committed towards a wide range of CCS-related projects, initiatives and programs. Over $1.3 billion was identified as actually distributed.

The government found it difficult to find projects to fund, and funded projects often failed. While funding was sometimes ‘clawed back’, other times this was not possible. ZeroGen, a proposed coal plant with CCS, went into administration despite at least $187 million in subsidies. The 99% Australia-funded Global CCS Institute backed more overseas projects than Australian ones and had extravagant operational spending.

The coal industry also announced a $1 billion CCS industry fund, which they said would match federal government spending. The fund has collected and committed only $300 million (mostly for CCS projects), and some of this fund has been spent on election campaign promotion of “clean coal”. Contributions to the fund were deducted against royalties in some states, meaning the fund was subsidised by the taxpayer.

New Hope Group's open cut coal mine expansion sunk by Qld Land Court: a victory for the people of Acland, Oakey and the Darling Downs

The Guardian, 31 May 2017:

A court has recommended the Queensland government reject a controversial coalmine in what farmers and lawyers hailed as a historic victory in one of Australia’s largest environmental public interest cases.

The saga of the $900m New Acland mine proposal, which included a public slanging match between the broadcaster Alan Jones and Campbell Newman that led to a defamation suit by the former premier, drew to an extraordinary conclusion with a ruling by a land court member, Paul Smith, on Wednesday.

In what is believed to be the court’s first outright ruling against a major mine in its modern history, Smith recommended that the government refuse environmental and mining licences to its proponent, New Hope Coal.

It was a David and Goliath victory for landholders who put forward evidence of the miner’s faulty modelling of jobs and groundwater impacts, serious noise and dust impacts, and a history of local complaints.

Newman’s Liberal National party government was mired in controversy over its belated approval of the mine expansion, on Queensland’s Darling Downs, after New Hope’s parent company donations of about $900,000 to the federal Liberal party.

The LNP government had backflipped after vetoing the Acland proposal in 2012, with Newman saying it was “inappropriate” to expand the mine in the state’s southern food bowl.

Paul King, of Oakey Coal Action Alliance, a group of more than 60 farmers and objectors to the mine, said: “We suggested during the court proceedings that that donation was an attempt to influence the decision-making process.”

Guardian Australia also revealed that a Newman government minister involved in the government’s handling of the project had taken a $2,000 donation from a New Hope director and his daughter took a job at the company.

King said: “This decision, which clearly demonstrates no good reason for the mine to go ahead, is a vindication of a clean system.

“This shows that our system is robust.”

Jo-Anne Bragg, the chief executive of the environmental defenders office, which acted for the objectors, said it was “unprecedented in decades” for a Queensland court to recommend a flat rejection of a major mine.

“I think it is a watershed because it is so rare a group of landholders and locals can win against a big, well-resourced mining company,” she said.

The ruling comes four months after the federal environment minister, Josh Frydenberg, approved the mine with “28 strict conditions”.

Bragg said the EDO expected the state resources minister, Anthony Lynham, and the environment department to follow the court’s recommendation after a “very thorough” 96-day trial and 459-page decision.

The case saw New Hope cut its original job projections from an average of 2,953 a year to 680 net jobs nationally, when other industries displaced by the mine were taken into account.

The court also heard the company would claw back an estimated $500m in royalties from a legal loophole that would see taxpayers receive a cut of just 7%.

Landholders mustered evidence that unreliable groundwater modelling by the miner put farmers’ groundwater at risk. They also argued that more than 100 local complaints to New Hope and 30 to state environmental officials about coal dust and noise levels had effectively fallen on deaf ears for a decade.

This was the basis of evidence of a high risk of the new mine exceeding air-quality limits.

It was a long hard fight spread over 96 days commencing in March 2016 before this judgment was delivered on 31 May 2017, New Acland Coal Pty Ltd v Ashman & Ors and Chief Executive, Department of Environment and Heritage Protection (No. 4) [2017] QLC 24:

ORDER/S:

1. I recommend to the Honourable the Minister responsible for the MRA that MLA 50232 be rejected.

2. In light of Order 1, I recommend to the Honourable the Minister responsible for the MRA that MLA 700002 be rejected.

3. I recommend to the administering authority responsible for the EPA that Draft EA Number EPML 00335713 be refused.

4. I direct the Registrar of the Land Court provide a copy of these reasons and access to the Land Court e- trial site to the Honourable the Minister administering the Mineral Resources Act 1989 and to the administering authority under the Environmental Protection Act 1994.

5. I will hear from the parties as to costs.

Memo to all federal and state members of parliament: The Great Artesian Basin is not a vast underground sea of fresh water so stop treating it as if it is

Figure 1. The Great Artesian Basin; spring cluster data sourced from Fensham (2006Fensham, R. 2006. Spring wetlands of the Great Artesian Basin. Paper for the 2006 Australian State of the Environment Committee, Department of Environment and Heritage, Canberra.http://www.deh.gov.au/soe/2006/emerging/wetlands/index.html(accessed December 16, 2014). ).

It is long past time that all parliamentarians of every political persuasion ceased robbing the nation of its present and future water security with their petty partisan politics and insane reliance on ideology over scientific fact.

In simple language Kim de Rijke, Paul Munro & Maria de Lourdes Melo Zurita point out that the Great Artesian Basin is not an endless supply of fresh water and to treat it as such is dangerous.

Taylor & Francis Online, 11 February 2016:

Excerpt from Society & Natural Resources, An International Journal  Volume 29, 2016 - Issue 6: Thinking Relationships Through Water

With regard to the process of extracting gas and subterranean water, a commonality in the submissions of CSG companies and state governments is the simplification of the GAB. It is constructed as a large, well-understood, and unproblematic body of underground water:

[The GAB is] equivalent to approximately 22% of Australia’s land mass. Compared to the total storage capacity of the GAB, the amount of water projected to be extracted during CSG production is very small … the annual water extraction is likely to be less than 0.0002% of total storage. This is the equivalent of taking approximately 5 litres out of an Olympic sized swimming pool. (Australia Pacific LNG 2011, The Senate Inquiry, Submission 368).

Water, in such submissions, is a simplified and abstracted object of nature to be represented solely in terms of volumes and percentages. It is exemplar of Jamie Linton’s (2014 Linton, J. 2014. Modern water and its discontents: A history of hydrosocial renewal. Wiley Interdisciplinary Reviews: Water1 (1):111–20. doi:10.1002/wat2.1009 [CrossRef], [Google Scholar]) notion of “modern water’” a particular way of knowing and relating to water abstracted from its local, social, cultural, religious, and ecological contexts. The anxiety-riddled relationships between the arid region overlying the GAB and water resources are posited as insignificant to extractive practices. Such instrumental and rationalist simplification is part of discursive strategies to produce a view of subterranean water amenable to the (economic) growth of the modern state (Linton 2010 Linton, J. 2010. What is water? The history of a modern abstraction. Vancouver, BC, Canada: UBC Press. [Google Scholar]; 2014 Linton, J. 2014. Modern water and its discontents: A history of hydrosocial renewal. Wiley Interdisciplinary Reviews: Water1 (1):111–20. doi:10.1002/wat2.1009 [CrossRef], [Google Scholar]; Finewood and Stroup 2012 Finewood, M. H., and L. J. Stroup. 2012. Fracking and the neoliberalization of the hydro-social cycle in Pennsylvania’s Marcellus Shale. Journal of Contemporary Water Research & Education 147 (1):72–79. doi:10.1111/j.1936-704x.2012.03104.x[CrossRef], [Google Scholar]). The final Senate Inquiry report, however, chided some CSG company submissions, noting that

[The GAB] is not a vast underground ‘sea’ in which levels and pressures quickly and uniformly adjust to the extraction of water from one part. Rather it is a highly complex system of geological formations at a range of depths, of variable permeability holding water of different quality, at different pressures and through which water flows at very different rates, if it flows at all. The reduction in pressure in a coal seam will result in a local fall in the water level and pressure in that particular area which may alter the rate and direction of the movement of groundwater in adjacent formations. The impact of this change may take many years to have a measurable impact on adjacent aquifers. Similarly the contingent loss of water from adjacent aquifers may not be made good by natural recharge for decades or even centuries. (RATRC 2011, 19)

Discursive attempts by CSG proponents to portray a simplified body of subterranean water thus sit uneasily alongside broader scientific narratives of the GAB. A critical scientific challenge, as the Commonwealth Scientific and Industrial Research Organisation (CSIRO, cited in RATRC 2011 Management of the Murray Darling Basin interim report: The impact of mining coal seam gas on the management of the Murray Darling Basin. Commonwealth of Australia 2011 Rural Affairs and Transport References Committee. (accessed February 8, 2016). , 19) notes, is “to visualize its exact structure.” While the GAB is no longer described as a source of “mystery water” (Powell 2011 Powell, O. C. 2011, Great Artesian Basin: Water from deeper down. In Queensland historical atlas: Histories, cultures, landscapes.(accessed February 8, 2016).), disparities point to continuing knowledge contests fuelled by the limitations of geological modeling technologies that aim to make “darkness visible” (Shortland 1994 Shortland, M. 1994. Darkness visible: Underground culture in the golden age of geology. History of Science 31 (1):1–61. doi:10.1177/007327539403200101 [CrossRef], [Google Scholar]).

Read the full article here.

Problems with tax collection from Australian resource and energy sector due to aggressive avoidance strategies

It would appear that successive federal and state governments have allowed the resource and energy sector to take Australia for everything except the gold fillings in its teeth……..

2 Office of the Chief Economist, Resources and Energy Quarterly, December 2016; Office of the Chief Economist, Resources and Energy Quarterly, December 2015; Office of the Chief Economist, Resources and Energy Quarterly, December 2014.

[Australian Taxation Office (ATO) 30 March 2017 submission to Senate Standing Committees on Economics, Inquiry into Corporate Tax Avoidance]

The Sydney Morning Herald, 29 April 2017:

Multinational gas companies will soon sell an annual $50 billion worth of Australian liquefied natural gas to foreign markets, but the nation will have to wait more than a decade for any revenue boost and some projects will never pay a cent in tax for the resources they extract.

A report prepared for the Turnbull government into the petroleum resource rent tax has confirmed fears, first revealed by Fairfax Media in 2015, that revenue from offshore gas will continue to flatline until at least 2027.

Despite that, Treasurer Scott Morrison insisted on Friday that Australians were not being shortchanged, but said the government would consider some changes to the system.

The review of the PRRT by former treasury official Mike Callaghan has acknowledged there are systemic problems and recommended changes to toughen the system for new LNG projects.

But, in a clear victory for the $200 billion industry, he shied away from urging any major changes for projects already past the investment stage, including Chevron's giant Gorgon and Wheatstone ventures and Shell's Prelude project.

The Callaghan report was released amid the political wrangling over east coast gas supply and on the same day the Senate inquiry into corporate tax avoidance grilled LNG bosses in Perth.

The Sydney Morning Herald, 26 April 2017:

Foreign-owned gas companies have legally avoided paying significant tax on billions in earnings from their Australian operations because of loopholes, according to a study. 

The loopholes have allowed the companies to write off interest payments for the borrowings of offshore subsidiaries, it has been claimed.

The study, by academic accountants at the University of Technology School of Accounting, and left-leaning campaign group GetUp, looked at the available balance sheet data of gas giants ExxonMobil and Chevron. It found the two companies have achieved colossal revenue flows from their Australian operations but paid little if anything in petroleum resource rent tax in recent years.

The practice is known as "debt loading" or "thin capitalisation".

Over the two years 2013-14 and 2014-15, Chevron earned more than $6.12 billion in revenue, but paid nothing in PRRT, according to the assessment.

It found ExxonMobil achieved revenue of almost three times that at $18.08 billion in the same period, but paid only $803.5 million.

The study concluded that between the operation of the company tax rules and the petroleum resource rent tax regime these enormous multinational resources companies can "load up" their balance sheets with excessive debt, thereby reducing taxable income to the point where the tax liability is low or non-existent.

The report, Investigation into the Petroleum Resource Rent Tax and Debt Loading in Australia – 2012 to 2016, found 95 per cent of oil and gas projects in Australia paid nothing in PRRT in 2014-15.

Australian Petroleum Production & Exploration Association (Appea) Ltd, Submission to the Review of Commonwealth Petroleum Resource Taxes, February 2017: 

APPEA does not consider a case exists for any changes to be made to the existing PRRT provisions.

Oil and gas corporation Santos Limited currently seeking to establish coal seam gas fields in NSW stated in a 3 February 2017 written submission to the current Senate inquiry into tax avoidance:

Santos has participated in a number of offshore and onshore oil and gas projects during the period of operation of PRRT, from 1 July 1986 (see attachment). Based on our experience with petroleum projects in which Santos has an interest it is our view that PRRT has operated as intended and that therefore the existing design features are appropriate…..

The declining revenues are a function of changes to the industry and currant commodity prices rather than changes or faults in the original design of PRRT.

Santos Limited with a total income of $3.38 billion in 2014-15 declared it had no taxable income in that financial year. The previous financial year its tax liability was $3.14 million on a declared taxable income of $27.34 million out of a total income before tax of $4.35 billion.

“The Adelaide-based Santos has long been accused of being a major contributor to the tight gas supply situation in eastern Australia due to the reliance of its Gladstone LNG project on third-party suppliers.”

BACKGROUND

The Australian, 25 August 2012:

SOME of Australia's biggest oil and gas players expect to pay little or no additional tax on their multi-billion-dollar onshore energy projects, putting federal government hopes of billions of dollars of additional revenue in doubt.

The admissions by Woodside Petroleum, Santos and Origin Energy indicate the government is unlikely to receive any significant additional funds in the foreseeable future from the expanded petroleum resources rent tax.

Parliament of Australia, Corporate Tax Avoidance:

On 2 October 2014 the Senate referred an inquiry into corporate tax avoidance to the Senate Economics References Committee for inquiry and report by the first sitting day in June 2015.

On 15 June 2015, the Senate granted an extension to the committee to report by 13 August 2015. On 12 August 2015, the Senate granted an extension to the committee to report by 30 November 2015. On 23 November 2015, the Committee was granted an extension to report by 26 February 2016. On 22 February 2016, the committee was granted an extension to report on 22 April 2016.

On 2 May 2016, the Senate granted the committee a further extension to report by 30 September 2016.  

The inquiry lapsed at the end of the 44th Parliament.

On 11 October 2016, the Senate agreed to the committee's recommendation that this inquiry be re-adopted in the 45th Parliament. The committee is to report by 30 September 2017……

On 1 December 2016, the committee resolved to broaden the scope of the inquiry to include Australia's offshore oil and gas industry.

The committee has asked to receive submissions on the treatment and/or payment of:

i. royalties;

ii. the Petroleum Resource Rent Tax (PRRT);

iii. deductions; and

iv. other taxes

by corporations involved in Australia's offshore oil and gas industry, including matters relating to the collection of these moneys by government.

University Of Technology Sydney, Ross McClure et al, Analysis of Tax Avoidance Strategies of Top Foreign Multinationals Operating in Australia: An Expose, 19 April 2016:

Multinational corporations are in a unique position to engage in tax aggressive strategies, as they are generally large in size and highly profitable, they exhibit low levels of debt in their capital structure, and have operations across national borders that generate foreign income streams. The overall group is made up of multiple entities across a number of tax jurisdictions and most multinational corporations have at least one subsidiary in a tax haven.

These characteristics have been associated with tax shelter activity in the U.S. (Wilson 2009) and with aggressive tax planning strategies such as abusive transfer pricing in Australia (Richardson et al. 2012). The information technology, pharmaceutical and energy sectors are both dominated by large multinational corporations and provide strong mechanisms that allow these corporations to divert profits away from where value and profits are created in order to reduce their tax liabilities.

News.com.au, 17 March 2017:

Gas on the east coast of Australia is controlled by a handful of companies and the lack of competition means they can charge higher prices locally.

At the moment, supply is controlled by six companies: Santos, Exxon, BHP, Origin, Arrow Energy and Shell. Some of these companies also control pipelines used to transport gas around the country, also adding to inflated prices……

He [energy analyst Bruce Robertson] said the global glut of gas, which is predicted to continue until 2030, has also put more pressure on companies to make money domestically.

The more they restrict supply locally, the more money they make.

It’s created the bizarre situation that sees Australian gas being sold in Japan for a wholesale price that is cheaper than the price it’s available for in Australia.

Santos, Shell and Origin Energy have to stick to long-term contracts they signed with Japan amid a global glut, but the lack of competition in Australia means they can restrict supply locally and drive up prices.

Australians are now paying a price higher than the international price for gas.

There’s even talk about Australia importing its own gas back because this would be cheaper.

Australia is also not profiting as much as we could from selling our gas overseas.

Japan reportedly puts a tax on the gas it imports from Australia, which will deliver it $2.9 billion over the next four years.

In comparison, Australia will not receive any money from its petroleum resource rent tax from gas projects over the same period. We get $0 in tax from selling our gas overseas.

Most of the $800 million we do get from the tax every year comes from established oil operations in the Bass Strait, rather than from LNG producers.

How soon will Adani go broke in the Galilee Basin?

Reading the information set out below leads me to wonder how the Federal Government and Queensland Government will cope, both politically and economically, if the Adani Group's Carmichael Mine and Rail Project leads to a massive derelict mine site with its twenty-six Australian subsidiaries under administration or in receivership.

INSTITUTE FOR ENERGY ECONOMICS AND FINANCIAL ANALYSIS (IEEFA)*:

2013

Remote Prospects: A financial analysis of Adani's coal gamble in Australia's Galilee Basin

The Adani Group is highly geared:

 Against an external market capitalisation of US$5.17bn, The Adani Group has an estimated US$12bn of net debt, a significant portion of which is US$-denominated with limited hedging.

Adani Power is of particular concern, being loss-making with net debt over 300% of its current market capitalisation.

2015

19 May The Latest Prospects for Adani's Coal Project? More Remote Than Ever

The project would require a massive and improbable infusion of debt, but a growing number of global banks key to most major coal-mining investments have eschewed it, mostly because of the risk it would pose to the Great Barrier Reef. (The 11 banks that have taken a public pass on the project include Deutsche Bank; HSBC; Royal Bank of Scotland; Barclays; Morgan Stanley; Citigroup; Goldman Sachs; JP Morgan Chase and most recently Societe Generale, BNP Paribas and Credit Agricole. In May 2015 Bank of America announced it would move to exit coal lending entirely.

15 September The Latest Prospects for Adani's Coal Project? More Remote Than Ever

With the Carmichael coal proposal commercially unviable at current or forecast thermal coal prices, the project is increasingly unbankable. Fifteen of the world's largest financial houses have either ceased working on this proposal or ruled out involvement, including both CBA and Standard Chartered, where advisory mandates have expired.

Continued momentum in technological developments underpins the scaled up commercial rollout of renewable energy and energy efficiency globally. As such, the strategic 'moment' for large-scale export-focused greenfields coal mines has passed.

2017

25 April Adani: Remote Prospects - Carmichael Status Update

Shareholders and financiers of Adani Enterprises face substantial risks due to the company's continuing development of the controversy-plagued Carmichael coal project in the face of major adverse structural shifts in market conditions.

The proposed mine, in Australia's remote Galilee Basin, remains a high-cost, high-risk project that is reliant on substantial public subsidies for it to be remotely financially viable. Even with concessional loans, IEEFA analysis shows the project is likely to be cash flow negative for the majority of its operating life.

Shifts in Indian energy policy and pricing have materially increased the risk of Carmichael becoming a stranded asset. Legal challenges and community opposition to the project persist and are likely to escalate if the project moves to construction.

With a market capitalisation of just US$1.9bn and net debt of US$2.5bn, Adani Enterprises Ltd will struggle to contribute equity for this A$5bn project. The project risks over-extending the balance sheet of Adani Enterprises to an extreme degree, creating a high level of financial risk to both shareholders and potential financiers……

In the years since Adani purchased the lease for the Carmichael mine, Indian government energy policy has shifted radically. Energy Minister Piyush Goyal has stated repeatedly that it is government policy to cease thermal coal imports—a policy that brings into question the very point of the proposed mine…..

* The Institute for Energy Economics and Financial Analysis (IEEFA) conducts research and analyses on financial and economic issues related to energy and the environment. The Institute's mission is to accelerate the transition to a diverse, sustainable and profitable energy economy.

The Institute for Energy Economics and Financial Analysis receives its funding from philanthropic organizations.  We gratefully acknowledge our funders, including the Rockefeller Family Fund,  Energy Foundation, Mertz-Gilmore Foundation, Moxie Foundation, William and Flora Hewlett Foundation, Rockefeller Brothers Fund, Growald Family Fund, Flora Family Fund, Wallace Global Fund,  and V. Kann Rasmussen Foundation.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The Hindu, 5 May 2016:

"PSU banks are owed about Rs 5 lakh crore by corporate houses and of this roughly Rs 1.4 lakh crore are owed by just five companies, which include Lanco, GVK, Suzlon Energy, Hindustan Construction Company and a certain company called the Adani Group and Adani Power," he said.

The amount owed by this group "called the Adani Group" both in terms of its long term and short term debt on Thursday is around Rs 72,000 crore, he added quoting reports.

"Yesterday it was mentioned that the entire amount that the farmers need to pay as crop loans is Rs 72,000 crore. The Adani Group itself owes to the banks Rs 72,000 crore," he said.

The Hindu, 8 May 2016:

The billionaire Gautam Adani's Adani group, with Rs 96,031 crore debt [est. AUD $1.9 billion], is under pressure to sell its stake in the Abbott Point coal mines, port and rail project. The Adani Group's debt stands at Rs. 72,000 crore [est. AUD $1.4 billion]. Last year, Standard Chartered bank had recalled loans amounting to $2.5 billion as part of its global policy of reducing exposure in emerging markets. Global lenders have backed out from funding the $10-billion coal mine development project. State Bank of India has also declined to offer a loan despite signing an MoU to fund the group with $1 billion. An Adani spokesperson declined to offer any comments on the issue.

India Infoline News Service, 19 May 2016:

S&P Global Ratings revised its outlook on Adani Ports and Special Economic Zone Ltd. (APSEZ) to negative from stable. 

ABC News, 22 December 2016:

The business behind the planned Carmichael coal mine in North Queensland is facing multiple financial crime and corruption probes, with Indian authorities investigating Adani companies for siphoning money offshore and artificially inflating power prices

Companies under scrutiny for the alleged corrupt conduct include Adani Enterprises Limited — the ultimate parent company of the massive mine planned for the Galilee Basin.

Two separate investigations into allegations of trade-based money laundering by Adani companies are underway — one into the fraudulent invoicing of coal imports and the other into a scam involving false invoicing for capital equipment imports.

"They are very serious allegations and they are being conducted by the premier Indian government agency investigating financial crime," Australia's foremost expert on money laundering, Professor David Chaikin of the University of Sydney, told the ABC.

"The allegations involve substantial sums of money with major losses to the Indian taxpayer."

Adani denies wrongdoing.

Rediff, 10 January 2017:

For the past year, Adani Power has been undergoing an overhaul for its debt, including measures such as equity infusion and refinancing. These have helped the company survive the rough times since proceeds from the compensatory rates are yet to come by. 

The firm expects its recent equity infusion, debt refinancing and the compensatory rate to lead to a turnaround in its financial position….

On December 6, the Central Electricity Regulatory Commission granted a compensatory rate for Adani Power's Mundra unit on the grounds of changes in Indonesian coal policy and shortage of domestic coal. 

In the address to analysts, after the September quarter results, the management said: "Once we have clarity in the form of CERC orders, we would obviously have the reason to work with the rating agencies and then we will make our plans."

The CERC order, however, has not led to any change of credit ratings so far for the company as its implementation hinges on the required Supreme Court approval for the same. 

CatchNews, 14 February 2017:

Earlier this year, the State Bank of India reportedly approved a loan of around $1 billion (Rs 6,600 crore ) for the company's coal mine in Australia. However, after much hue and cry in the media due to the highly stressed balance sheet of the public sector bank, the approval was withdrawn.

Hindustan Times, 11 April 2017:

The Supreme Court on Tuesday set aside an order by the Appellate Tribunal For Electricity allowing compensatory tariff to Tata Power Ltd and Adani Power Ltd, sending down shares of both companies.

Shares of Tata Power reversed early gains to fall as much as 6.78%, while Adani Power slumped up to 20% to its lowest since February 21.

The tribunal, in April last year, had said the two companies needed to be compensated as the change in Indonesian laws on coal export prices were outside the control of these companies.

Financial Review, 11 April 2017:

Indian billionaire Gautam Adani has told Malcolm Turnbull his company will seek a taxpayer-funded concessional loan of up to $1 billion to support his proposed $21.7 billion coal mine in Queensland......

Following a meeting with Mr Adani and his executives in New Delhi on Monday night, Mr Turnbull cautioned the loan – to help build a $2 billion railway line to link the mine to the coast – would have to be approved on its commercial merits by the independent board which administers the $5 billion Northern Australia Infrastructure Fund.

The Northern Star, 16 April 2017:

Shares for Adani Power Limited, the Adani Group subsidiary energy provider in India, were trading at 44.25 rupees (AU$0.9) on Monday, but dropped to 32.90 rupees by the end of trading on Friday.

Adani Enterprises, the subsidiary connected with the Carmichael Coal project, traded on Monday for 120.10 rupees ($AU2.46) a share, but has also dropped, reaching 116.85 by the end of Friday.

Westpac Bank, Climate Change Position Statement and 2020 Action Plan, April 2017:

….the International Energy Association’s (IEA) modelling indicates that under a two degree scenario thermal coal demand will peak in the current decade and decline thereafter…..

However, for new thermal coal proposals we will: Limit lending to any new thermal coal mines or projects (including those of existing customers) to only existing coal producing basins and where the calorific value for that mine ranks in at least the top 15% globally. We define the top 15% as having a specific energy content of at least 6,300 kCal/kg Gross As Received. This value is referred to as the Newcastle high energy coal benchmark.