A key approval for Adani’s Carmichael coal project has been overturned by the federal court, which ruled the federal government made a “legal error” in the way it assessed and approved plans for the miner to pump 12.5bn litres of water a year from a Queensland river.
The court case – brought by the Australian Conservation Foundation – challenged the government’s decision not to apply the “water trigger” to its assessment of Adani’s North Galilee Water Scheme.
The trigger is an element of Australia’s environmental law that demands the government assess the water impacts of all large coalmines and coal seam gas proposals.
A delegate for the federal environment minister, Sussan Ley, had previously justified a decision not to apply the water trigger on the basis that the specific proposal – whose purpose was to supply water to the Carmichael mine – was not itself a coalmining development.
The federal court decision says that reasoning is in error.
Adani said its activities – including the ongoing construction of the mine and its future operation – will not be impacted by the decision. Concerns have previously been raised about whether it has sufficient supplies to support water-intensive construction and mining activities without access to the North Galilee Water Scheme.
The court’s decision effectively sends the matter back to the environment minister – for a third time – to decide whether to apply the water trigger. The ACF has previously won a court challenge that argued the federal government decision was made without proper consideration of public submissions.
Environment groups said Ley must now apply the trigger, which would require a thorough assessment of Adani’s plans.
The ACF says the decision also “reaffirms the legitimacy” of the trigger as a safeguard in Australian environmental law.
“This is a great win for the protection of water on our dry continent from coalmining and coal seam gas extraction,” said the ACF’s chief executive officer, Kelly O’Shanassy.
“It’s a win for regional communities and farmers who depend on reliable flows of river water in our drought-prone landscape.
“It will set a new precedent that essential infrastructure for coal seam gas and large coalmining projects must be assessed under our national environment law.
O’Shanassy said the decision raised doubts about the viability of the Adani mine without access to its expected water source.
“Without the [water scheme], it’s hard to see how Adani has enough water to operate its mine.
“We expect the federal government to properly apply the law.”
In a statement, Adani said it would “carefully consider the judgment” and its future options, but said the project would continue.
“Regardless of today’s court judgment, construction on the Carmichael mine and rail project is well under way, and importantly, the North Galilee Water Scheme project is not required for these construction activities,” a spokeswoman said.
“We have also secured water for the operational phase that does not require the North Galilee Water Scheme.
“For the avoidance of doubt – today’s decision will not have any impact on the construction or operation of the Carmichael mine.”
O’Shanassy said the federal court’s decision would also “apply to other potential water sources for the Carmichael mine”.
