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December, 201811:47 AM



Adani set to self-finance new Australian coal mine

Adani set to self-finance new Australian coal mine

Despite pressure from environmental groups, Indian mining company Adani is set to press ahead with its intentions to build a coal mine in Queensland.

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By Mary Blake 30.11.2018

Despite pressure from environmental groups, Indian mining company Adani is set to press ahead with its intentions to build a coal mine in Queensland.

Coal has become somewhat of a dirty word in recent years, and along with initiating a drive toward cleaner sources of energy that emit less carbon, the environmental side is trying to phase out coal where possible. This has put Adani at odds with the movement, but the company said that it will go ahead with its plans and believes that it can ease concerns about the project.

Adani’s Queensland mine has taken a long eight years to get off the ground simply because of the scale of opposition within some Australian quarters. The company has had to appear in court as environmental groups tried to impose delays.

This means that the project has been “scaled back,” according to Adani CEO Lucas Dow. However, he is confident that despite delays and problems with getting full approval, work on the mine should begin “imminently.”

In order to start the process, Adani will have a much smaller level of production than originally anticipated. Dow said that it will “ramp up” from there, building up to a 27.5-million-tonne output each year. This is half of what the company originally intended, which shows how strong the level of opposition has been and the kinds of challenges that the coal sector presently faces.

Dow said that the project has internal financing and relies on no external backers, which may explain the smaller production level. He commented: “We have finance, and we are ready to start.”

Adding that the company’s Carmichael mine will be “100% financed through the Adani Group’s resources,” Dow indicated that the mine got approval because it is on the same scale as many others in the area. It will be open-cut as well as smaller than originally intended.

Dow also addressed the project’s start date, saying that “preparatory works at the site are imminent.” Speaking of Adani’s “capacity to deliver a financing solution,” which also held the process back, he added that $3.3bn has already gone into the company’s Australian interests.

A series of targeted protests and counter-movements pushed Australia’s major lenders to stay away from Adani and coal mining, and they appear to have had an effect. Although these protests did not prevent the mine’s plans from going forward, much more scrutiny took place regarding Adani’s finance plans, which meant that it had to find a different way to fund the project. Its plans also saw a reduction in scale, which again highlights the current mood surrounding coal and the acknowledgement that although it is useful, there are clear climate problems associated with it that make investors wary.

Dow was quick to hit back, saying: “This project stacks up both financially and environmentally.” Opposition groups complained about the original sketched-out expansion of the mine, saying that it could do great damage to the barrier reef.

However, Dow believes that the mine will produce enough benefits to go ahead, including the “jobs and business opportunities we have promised for North Queensland and Central Queensland, all without requiring a cent of Australian taxpayer dollars.” The opposition, including conservation groups, responded that they have no intention of giving up on trying to stop the project from moving forward.

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