On Coalfields Highway close to Collie, south of Perth, vehicles carrying trailers filled with coal will be seen chugging their means alongside the bitumen.

They’re hauling tonnes of the black gasoline alongside a freeway linking Western Australia’s coal trade, and the guts of its energy technology system, with the remainder of the world.

Only, the vehicles are usually not driving down the hill to ship the coal to prospects additional afield and even abroad.

Rather, they’re heading up the hill to make sure the coal provides desperately wanted to maintain the native energy system operating and the lights on.

It’s all so weird, and such a world away from the heady days of 2010 when Indian pursuits paid high greenback for a coal mine whose proprietor had gone bust.

Back then, conglomerate Lanco Infratech forked out a hefty sum of $750 million to purchase the Griffin Coal mine from the wreckage of Ric Stowe’s fallen enterprise empire.

Standing proper behind Lanco was India’s largest privately owned financial institution ICICI, a $100 billion behemoth with a mortgage e-book price about $1 trillion.

Buying into flawed desires

Propelling the deal was an bold plan to export as much as 20 million tonnes of Collie coal again to the subcontinent.

With a inhabitants of greater than 1.2 billion folks on the time – virtually 1.4 billion now – demand for electrical energy in India was hovering and thermal coal was extra invaluable than ever.

The export plans have been keenly offered to them by the directors of a failed mine – insolvency large KordaMentha.

Just as importantly, they have been eagerly accepted by an organization, and a rustic, that was eager to stamp its mark on the stage of world vitality buying and selling.

But it was all the time a flawed plan.

Realistically, Lanco was offered a pup – a mirage that it might dig up hundreds of thousands of tonnes of coal annually and export the gasoline to a rustic 1000’s of kilometres away.

Unlike the japanese states, with their enormous complexes of coal mines and railroads to ports, WA’s coal trade is successfully landlocked and sure by the home market.

Lanco might need been aiming to make its a refund by transport the coal to India, nevertheless it first wanted to take a position billions of {dollars} constructing the infrastructure required to deal with the commerce.

In the meantime, the corporate was primarily reliant on Griffin’s present home enterprise.

That, as Lanco quickly came upon, was a highway to nowhere.

Digging an ever deeper gap

Griffin was locked with its prospects into long-term contracts that required the miner to promote its coal for a worth that hardly coated its prices of manufacturing.

Once bills corresponding to curiosity on Lanco’s debt and payments for upkeep and new equipment have been factored in, Lanco was, as they are saying in enterprise, beneath water.

From the second it grew to become apparent Lanco was trapped in a ruinous home market with no hope of realising its export desires, the gig was up.

And but, regardless that that time was arguably reached not lengthy after Lanco took the keys at Griffin, it refused to acknowledge the apparent.

Lanco ultimately went to the wall in 2017, a uncommon instance of a giant Indian firm being allowed to fail.

But that simply transferred possession of the Griffin debacle to the corporate that had been performing because the puppet grasp all alongside, ICICI.

Instead of utilizing Lanco’s implosion as an opportunity to chop its losses, ICICI merely dug in and made a foul state of affairs even worse.

When receivers have been lastly appointed to the mine to move off a takeover try by Griffin’s greatest buyer, the Bluewaters energy station, almost $1.5 billion was owed to its lenders and suppliers.

Of this, a staggering $1.4 billion was owed to the so-called secured collectors, who’re the primary in line to be paid from no matter cash will be raised by promoting the mine.

ICICI is by far and away the most important of these, reportedly owed as a lot as 80 and even 90 per cent of that $1.4 billion.

Hopeless guess, horrible prices

It appears clear that after greater than a decade in ICICI’s fingers, Griffin Coal has become a festering sore on the bank’s balance sheet in addition to a menace to Western Australia’s very energy provide.

Worst of all, ICICI has plunged greater than a billion {dollars} right into a hopeless guess on international soil whereas a whole bunch of hundreds of thousands of Indians endure life under the poverty line.

According to the United Nations’ Millennium Development Goals, 84 per cent of Indians lived on lower than $US6.85 a day in 2019.

Even if the road is drawn decrease, there have been nonetheless 80 million folks eking out an existence on not more than $US1.25 a day.

Efforts to get ICICI to speak about, and even acknowledge, the mess at Griffin are futile.

To date, no public disclosure has been made by the financial institution concerning the colossal waste of cash on a doomed Australian coal mining operation.

Throw in what state Liberal MP Steve Thomas has described as a “mixed-up, murky” deal by ICICI to lend an extra $US60 million to Griffin by an obscure third occasion, and the unusual story solely will get more unusual, and troubling.

That all of this hasn’t triggered extra questions in India, the place ICICI has solely simply handled a serious scandal involving its now ex-CEO, is deafening in its silence.

A sorry story with no winners

It suggests nobody within the financial institution has acknowledged to regulators, shareholders or, simply as importantly, the Indian public how dangerous the entire predicament is.

Perhaps this may be chalked as much as what monetary analyst Tim Buckley described because the behavior amongst Indian businessmen of “kicking the can down the road”.

The drawback with kicking the can down the highway, although, is it virtually inevitably makes the ultimate reckoning a lot worse.

In Western Australia, there’s an all-too real chance that reckoning could take down the state’s main electricity system.

Dr Thomas laments that the implications at ICICI might solely prolong so far as “seeing some vice presidents of the private bank lose their jobs”.

The actual losers, as is depressingly widespread in these circumstances, are prone to be bizarre Indians, far too a lot of whom are mired in excessive poverty.

For them, $1.4 billion should appear to be an terrible lot of cash.