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The Guardian - AU
The Guardian - AU
Ben Smee

Urannah dam business case assumes massive growth in Queensland coalmining

Urannah creek
The business case for the Urannah dam is underpinned by the assumption that coalmining in the Queensland Bowen basin will continue to grow Photograph: Jeff Tan

The business case for the proposed Urannah dam in north Queensland – backed by a $483m federal government grant announced last month – reveals the project has been designed to support a massive future expansion of coalmining in the Bowen Basin.

Taxpayer funding to the Urannah project has been described as “brazenly political” and was announced before the National Water Grid advisory body, now disbanded, had been able to scrutinise a detailed business case.

The proponent’s business case has since been released, prompting concerns about the economic return on investment. It said that over 30 years, local communities would obtain 95c of economic benefit from every dollar spent.

Supporting studies show the stated economic benefit is underpinned by assumptions that more water would support the intensification of coalmining – and the development of new mines – in the Queensland Bowen basin.

The studies use assumptions from a 2018 report for the mining lobby group, the Minerals Council of Australia, including predictions that metallurgical coal exports would grow by 113m tonnes, or “the equivalent of a large export mine being added to the market every year to 2030”.

As a result, the Urannah business case assumes a growth in mining – and associated water demand – until 2049.

Tim Buckley, an energy market analyst, said the assumption was “ludicrous” and the market demand for metallurgical coal would, according to a modelling by the International Energy Agency, likely decrease by 57% over the longer term.

“We don’t need more dams for coking coal, we need enabling investment to catalyse the new massive zero-emissions industries of the future, where the job opportunities are literally in the hundreds of billions of dollars a year,” Buckley said.

“Why are we planning on building more stranded assets rather than building more assets of the future?”

When the proponent, Bowen River Utilities, conducted “market sounding” for the Urannah project by talking to potential water customers, it spoke to 13 potential industrial users – all coalmines in the Bowen Basin.

The Urannah business case predicts $555m of new economic benefit in the mining sector as a result of the dam project and an additional $727m from agriculture.

Guardian Australia reported on Thursday that companies linked to Urannah project had donated more than $150,000 to the Queensland Liberal National party, and that the wife of the federal MP Julian Simmonds is working for the proponent as its communications manager.

A spokesperson for Bowen River Utilities said John Cotter Jr, the sole director of the company, “has made donations to both the ALP and the LNP, all of which have been publicly declared (with) the Electoral Commission Queensland and Australian Electoral Commission”.

Conservation groups said the extent to which the project was designed to facilitate the expansion of Queensland coalmining meant it could be used to campaign against inner-city Liberals – including Simmonds, who represents the green-tinged west Brisbane electorate of Ryan.

Simmonds has been contacted for comment.

Dave Copeman, the head of the Queensland Conservation Council, said connections between the LNP and destructive projects “demonstrates yet again that the party has a serious credibility problem when it asks voters to take it seriously as taking action on climate”

When the federal government announced funding ahead of the federal budget, the deputy prime minister, Barnaby Joyce, said the project would “provide a secure and affordable water supply for mining, industrial and urban use”.

Bowen River Utilities did not respond to a specific offer to comment about the extent to which the project relied upon the expansion of coalmining.

A spokesperson has previously said: “The Urannah Dam will transform the Greater Whitsunday region and deliver thousands of jobs, water security, reliable renewable energy and enormous economic benefits for North Queensland taxpayer”.

“That’s why it is backed by regional communities who have a real determination driving us to build this project.

“The dam also has bipartisan support from all three levels of government.”

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