Adani to fully fund its troubled coal mine and rail project in Australia; refuses to give time frame to start work

Adani said the only approvals the project now needs are standard clearance for mine management plans.

Reuters November 29, 2018 19:37:47 IST
Adani to fully fund its troubled coal mine and rail project in Australia; refuses to give time frame to start work

India’s Adani Enterprises will fully fund its coal mine and rail project in Australia itself, the company said on Thursday, taking a big step closer to building the long-touted project that has faced fierce resistance from green groups.

Adani Mining chief executive Lucas Dow announced the funding milestone for the Carmichael mine in a speech in Queensland, a state that has been counting on the project to create jobs.

He did not comment on the actual cost. Last year, the company said it was looking to borrow under A$2 billion ($1.46 billion) to get the A$4 billion project off the ground, targeting its first exports in March 2020.

Adani to fully fund its troubled coal mine and rail project in Australia refuses to give time frame to start work

Representational image. Reuters image

Having missed many deadlines over the past few years, Adani also declined to give a time frame on Thursday for beginning construction or the first production from Carmichael.

Adani shrank the project plans early last year to make it more affordable after running into problems lining up financing, as banks backed away from funding new coal mines under pressure from investors worried about climate change.

It now plans to start by producing around 10 million tonnes a year for the company’s own use, eventually ramping up to 27.5 million tonnes for the first stage of the project. A mine of that size with a rail spur would typically take around two years to build.

Initial output is just a quarter of Adani’s original plan to produce as much as 40 million tonnes a year spending A$16.5 billion to build a mine along with rail and port infrastructure.

The reduced plan only requires a 200-km (124-mile) rail spur connecting to Aurizon Holdings’ rail line, rather than a whole new 388-km competing line, and no port expansion, which helped drive down the cost.

“The sharpening of the mine plan has kept operating costs to a minimum,” Dow said in his speech.

“The project stacks up both environmentally and financially,” he said.

The mine has battled a string of lawsuits from environmental groups, who argue it will contribute to global warming and damage Australia’s Great Barrier Reef.

“We will fight this to the end. This is not a done deal,” Australian Marine Conservation Society spokeswoman Imogen Zethoven said in a statement, saying the company still needed some final approvals.

Adani said the only approvals the project now needs are standard clearance for mine management plans.

Updated Date:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Gautam Adani's billion dollar Australian coal dreams are turning black
Corporate

Gautam Adani's billion dollar Australian coal dreams are turning black

Adani may have thought they were buying a coal mine, but they merely bought themselves financial trouble, which is why they are now seeking an exit from Abbot Port. But if Adani wants to sell the port through which it would transport coal to India, it is likely that he will shelve all plans of developing the Carmichael project too.

Adani Enterprises may walk away from $10 bn Carmichael mine project in Australia
Business

Adani Enterprises may walk away from $10 bn Carmichael mine project in Australia

Gautam Adani had said the company may abandon the project because of long delays due to legal challenges

Adani gives final approval for $4 billion Carmichael coal mine, rail projects in Australia
Business

Adani gives final approval for $4 billion Carmichael coal mine, rail projects in Australia

The project would pay billions of dollars in royalties and taxes, create jobs and export coal to India help bring electricity to rural regions, the company said.