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| Adani's greenlight for the Carmichael mine will energise environmental activists. Dan Peled/AAP |
After eight years of court challenges from environmental activists and delayed approvals, Adani Australia chief executive Lucas Dow on Thursday said the company had finally reached financial close on the project which could start exporting coal by the end of 2020.
The decision could prove a catalyst for opening up the frontier Galilee Basin in Central Queensland - with other big coal mines expected to follow including GVK/Hancock Coal's two mines and MacMines' recently approved $6.7 billion China Stone project. It will also be welcomed by pro-coal activists in the Morrison government, including federal Resources Minister Matt Canavan.
The project will also put pressure on federal Labor leader Bill Shorten and Queensland Labor Premier Annastacia Palaszczuk - who both have been less than enthusiastic about the project - in the lead-up to next year's federal election.
Last month, Adani announced it would scale back the size and scope of the Carmichael mine - trimming it back from the 60 million tonne $16.5 billion mega-mine, to a more manageable 10 to 15 million tonnes a year, with the potential to be scaled up to 27 million tonnes a year.
Adani, which has already spent $3.3 billion in Australia, said the capital cost of the scaled-back project would come in at around $2 billion. They had been talking to international banks to finance the project, but Mr Dow said this was no longer needed.
He said the "sharpening" of the mine plan had kept operating costs to a minimum and the construction and the operation of the thermal coal mine will now begin.
"We've pulled the trigger and we've got finance and we're ready to go," Mr Dow said in an interview with The Australian Financial Review.
"It has been a long time coming and we're obviously very excited about announcing this so we can get on and this and deliver the jobs for the people who have stood alongside us all this time. I'm desperate to have these jobs come into the northern part of Queensland."
Mr Dow said the project, which now only needs final management plans signed off by state and federal governments, would be funded by parent company Adani Group's finances rather than externally by a bank.
"It's akin to Rio Tinto or BHP funding the project. It's come from group Treasury. They have got it secured," he said.
When asked whether Adani Group had to borrow money from international banks to help fund projects including the Carmichael mine, Mr Dow said he "didn't want to speculate".
"That's a matter for group treasury. The important part for us is Carmichael mine and railway is fully funded and we're in a position to be able to get on with it. We're very much masters of our own destiny."
Mr Dow, a former BHP executive, said any future scaling up of the mine and rail to 27 million tonnes would be funded by profits from the mine's initial production.
Environmental groups, anti-fossil fuel organisations and even some politicians have expressed scepticism about whether the Carmichael project would ever get off the ground, given deadlines have been delayed over the past few years.
Mr Dow said Tuesday's announcement should remove any doubt about the Carmichael project stacking up, saying it remains within the first quartile of the global cost curve.
Adani said the Carmichael project will deliver more than 1500 direct jobs on the mine and rail projects during the initial ramp-up and construction phase and will support thousands more indirect jobs. This is a long way from the 10,000 jobs that had been touted for the project in recent incarnations.
Adani announced in September it would abandon plans to build its own 388-kilometre standard gauge railway line to Abbot Point, but it will now instead build a 200-kilometre narrow gauge line which will join Aurizon's existing coal network - a decision that saved it $1.5 billion.
The Adani rail line to the Galilee Basin will also open up the option for other projects including GVK/Hancock and Clive Palmer's Waratah Coal project to get up and running.
It has applied to Aurizon for access to its regulated Central Queensland coal network. The new 200 kilometre rail link will have the capacity for both the planned 27 million tonnes or up to 40 million tonnes down the track if required, and depending on market conditions.
The Palaszczuk government announced suddenly during last year's election campaign it would not support a federal loan for the Adani mine from the $5 billion Northern Australia Infrastructure Fund, saying it did not deserve any taxpayer funding. The move was seen as a pitch to secure Green preferences in a string of Brisbane seats. In November, the Palaszczuk government was returned for a second term.
Mr Shorten used to be a strong advocate for the Adani project, based on the jobs the project would create throughout regional Queensland. But he has backed down in recent months, using the same lines as the Palaszczuk government about no taxpayer funding for the mine.
Links
- Where Cheap Power Matters More Than Environmental Armageddon
- Adani Water Project Bypasses Full Environmental Impact Assessment Against Advice
- Adani Groundwater Bores Investigated Amid Claims They Were Sunk Without Approval
- Author Jeff Goodell On His New Book And Why He Wishes Climate Change Was A Hoax
- As A Grazier I Rely On Water. Adani’s Latest Plans Put Our Future At Risk
- Federal Government To Lend Money To Adani Business Associates
- Shorten Says Talk About Adani Mine 'Dumbing Down Climate Debate'
- Bill Shorten Says There's A 'Role For Coal' And Adani Mine Just 'Another Project'
- Could A Future Labor Government Really Stop The Adani Mine?
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