“A Glencore thermal coal mine that’s really all about the workers, small businesses and with climate costs worth half a coal truck driver’s salary!” No such thing, says the slayer of dodgy “independent experts” reports, the Australia Institute’s Rod Campbell. Rod unpacks the latest sketchy analysis underpinning yet another coal project, this time to increase Australia’s coal exports even further, out to 2044.
A few years back we threw a stone at consultants the Centre for International Economics (CIE) for walking both sides of the street on coal.
CIE had managed to simultaneously write a report for the mining industry showing that planning regulations were holding back mining export volumes, and also to work for the NSW Independent Planning Commission saying that coal volumes that industry claimed were “not plausible”.
So it was with some amusement that we noticed the CIE again being accused of hypocrisy, writing a report for the Minerals Council about how great more mining would be while again working for NSW Planning in hosing down claims about how great more mining would be.
And who was it throwing stones at CIE this time? Why, our old friends at Glencore! (p28 here and p11 here)
Glencore is applying to extend its Glendell coal mine out to 2044. They paid our other pals at Ernst and Young … sorry EY… to “independently” assess the economic benefits of their mine.
EY came to the happy conclusion that while the mine itself might only be worth a couple of hundred million, it would bring $468 million in benefits to NSW workers and $286 million to NSW suppliers while only causing climate damage worth $70,000.
A Glencore thermal coal mine that’s really all about the workers, small businesses and with climate costs worth half a coal truck driver’s salary! Fantastic!
It’s nonsense, of course. EY used dodgy methodology to come up with all these numbers.
That’s just business for econ consultants. The problem is that they used the same methods before, in court, and lost.
Slap down
Even that might not be a problem except that in court their economist (Stephen Brown) was slapped down by an economist from CIE (Nigel Rajaratnam). The judge declared that EY’s man (then at Cadence Economics) had “inflated” these results, that they were “unreliable and unproven” and parts of his analysis were “plainly wrong”. Rajaratnam’s analysis was accepted almost entirely.
(Side note: Brown’s performance in court didn’t damage his business – Cadence was bought by EY and he was made a partner of the global firm’s Australian operations.)
So as much as we were enjoying being on the same side as Glencore, this is where it ends.
CIE’s report for the Minerals Council is mainly meaningless modelling fluff but it doesn’t contradict their work for NSW Planning as Glencore claim. The CIE criticism of EY is on the money and has been found to be solid in court.
It’s a shame CIE cheapen their brand with occasional shilling for the MCA and friends.
Read more about the economics of the Glendell Project in The Australia Institute’s submission to the Independent Planning Commission NSW.
Rod Campbell is the Research Director at The Australia Institute.