Marred by protests over environmental concerns and legal and regulatory hurdles, energy giant Adani Group has announced it will self-finance the scaled-down version of the Carmichael mine in the coal-rich Galielee Basin of Australia. It will be entirely financed through the billionaire Gautam Adani-led Adani Group's resources, Adani Mining CEO Lucas Dow said in Central Queensland. He said construction and operation of the mine will now begin.
In a media statement issued by the group, Dow said, “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.” The company said 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. All coal produced in the initial ramp-up phase will be consumed by the Adani Group's captive requirements.
The coal mine was initially projected to produce 60 million tonnes per annum (mtpa) with initial production og 40 mtpa every year but the company will now scale down the operations. Dow said, “We will now begin developing a smaller open cut mine comparable to many other Queensland coal mines and will ramp up production over time to 27.5 mtpa.”
Once touted to be the world's biggest coal mines, the Carmichael coal mine project was announced in 2010 with an estimated cost of $16.5 billion. It was immediately hit by protests and court cases from environmental activists claiming the project would increase carbon pollution and cause irreparable damage to the Great Barrier Reef marine park in northern Queensland. A company representative said, “The capital requirement has reduced significantly. The previous figure included a longer rail ine, a larger mine, sustaining capital over mine life and a major port expansion. We are not providing a figure for the new delivery model but industry experts have estimated the capital requirement for the initial construction and ramp up of the mine and rail will be around AUD $2 billion.”
Adani has already invested $3.3 billion in the project which has been delayed by at least four years. Consequently, Australian banks have come under pressure to review their lending to fossil fuel developments, with Westpac Banking Corp. in April last year ruling out involvement in Carmichael. “The project stacks up both environmentally and financially,” Dow said. “We will now deliver the jobs and business opportunities we have promised for North Queensland and Central Queensland, all without requiring a cent of Australian taxpayer dollars.”