After battling with local residents and environment activists in Australia for almost eight years, Adani Mining has announced it will fund its troubled Carmichael coal mine and rail project from its own resources.
The announcement was made by Adani Mining CEO Lucas Dow in Queensland on Thursday.
“Our work in recent months has culminated in Adani Group ’s approval of the revised project plan that de-risks the initial stage of the Carmichael mine and rail project by adopting a narrow gauge rail solution combined with a reduced ramp up volume for the mine,” Dow said.
While he did not give a timeline, the company had earlier set a target of beginning exports from Carmichael by the end of FY19.
Last year, Adani had downsized the project and the capital outlay for it, from $16 billion to around $2 billion, in an attempt to secure funding. The project had been struggling to get lenders’ support given the fierce opposition from a dozen green groups.
The company will now develop an open cut mine of around 10 million tonnes per annum (mtpa) capacity, which it will ramp up to 27.5 mtpa over time. This is less than half the initially planned and approved capacity of 60 mtpa. The initial capacity will be used for Adani Group’s coal-based power projects in India.
Adani will also scale down a proposed 380-km-long greenfield rail line connecting the mine with a new coal export terminal at the Port of Abbot Point that it is developing as a part of the project. The company had tried to raise $1 billion from the Northern Australia Infrastructure Fund (NAIF) for the rail line; however, this, too, faced massive opposition.
“The sharpening of the mine plan has kept operating costs to a minimum and ensures the project remains within the first quartile of the global cost curve,” Dow said.
The Carmichael project will deliver more than 1,500 direct jobs on the mine and rail projects during the initial ramp-up and construction phase and will also support thousands of indirect jobs, he added. Adani had earlier promised the project would create 10,000 regional jobs.
Dow said Adani Mining is now working with Australia’s regulators to “finalise the remaining required management plans” which is expected to be completed in a few weeks.
‘Fight to continue’
However, Imogen Zethoven, the spokesperson of Australian Marine Conservation Society (AMCS), one of the groups opposing the project, said the fight will continue. “This is not a done deal. Adani still needs environmental approvals,” he said.