• Adani downsizes coal ambitions
Adani downsizes coal ambitions
01 Nov, 2018, 1 Comment

Summary: Indian conglomerate Adani is set to embark on a smaller first stage of the controversial Carmichael coal mine in Queensland that should see financing secured soon and construction start on a now $2 billion mine and rail project immediately after.....

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Adani’s new Australian chief, Lucas Dow, said Carmichael would now be delivered in smaller, phased mine developments, rather than the previous plan to build Australia’s biggest export coal mine capable of producing 27.5 million tonnes a year of coal.

It follows a decision last month to build a smaller, narrow gauge rail to link the Galilee Basin project to the existing Queensland coal rail network and will make financing easier.

The new plan is to reach the 27.5 million tonnes in two or three stages. “It reduces the capital ask, it’s efficient for the deployment of the capital, it allows us to get cracking sooner rather than later and it simplifies the funding solution,” Mr Dow told The Australian yesterday.

“We’re working through the final throes on finance and once we’ve got the finance locked and loaded we’ll be able to get straight into construction.”

Asked if the finance would be secured this year, Mr Dow said: “It’s not too far away.”

Carmichael has been rejuvenated under Mr Dow, a former BHP coal boss who joined Adani in April.

The rail plan announced last month has brought the project back into the frame after opposition from green groups spread into last year’s Queensland election and led Premier Annastacia Palaszczuk to knock it back for Northern Australia Infrastructure Facility funding to build a 388km stand-alone railway to the Abbot Point coal terminal.

Many, including Opposition Leader Bill Shorten, had written the project off as uneconomic.

Mr Dow said the rail plan would halve the previous $2.3bn rail cost. He would not comment on how much a mine would cost, but industry sources estimated a 10 million tonne per year first-stage mine would cost less than $1bn, given the previous spending Adani has already done in the area.

The cheaper rail plan and phased mine development means Adani will need to secure less ­finance than it was previously targeting, which should make funding it easier and quicker to secure.

The new rail plan will connect with Aurizon’s existing network and is essentially similar to one previously proposed by Aurizon that Adani had opposed.

Mr Dow would not give any indication of potential timing for first coal.

The most recent timeline given by Adani was in its local ­accounts, which were filed with the corporate regulator in June.

They said the company was targeting first production in 2020-21 from a first stage that would ­export 27 million tonnes of coal a year.

Further stages are designed to bring it to 60 million tonnes.

Resurgent thermal coal prices are also making the project more likely to go ahead.

Yesterday, Glencore, Australia’s biggest miner of thermal coal (which is used in power stations), took analysts to its coal mines in the Hunter Valley, where it last year joined with the Chinese-controlled Yancoal to buy Rio Tinto’s Coal & Allied business.

On the tour, Glencore coal marketing chief Tor Petersen said Asian coal generation would continue to need thermal coal imports and pointed to growing coal imports in India, the market Carmichael will target.

Opposition to the Carmichael mine from green groups has spilt into the broader community, particularly outside the region.

The pressure led Ms Palaszczuk to knock back NAIF funding during last year’s state election and has raised questions about Mr Shorten’s attitude to the project after he said this year it did not stack up economically.

The project has achieved primary environmental approval and is working through environmental management plans for some species.


Matt Chambers, 1/11/2018, www.theaustralian.com.au/business/mining-energy/adani-scales-back-carmichael-start/news-story/8d3a412aa46180dfba325c34ae9d09e7

  • MyPassion

    02 Nov, 2018

    Come in sucker. Australia government is likely being conned when only one small stage is completed.

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