COLUMN-Brave decision! Adani to start Australian coal mine on its own – by Clyde Russell (Reuters U.S. – August 29, 2017)

https://www.reuters.com/

LAUNCESTON, Australia, Aug 29 (Reuters) – Adani Enterprises’ decision to start building Australia’s biggest coal mine would appear at face value to be a straightforward announcement that a major project is finally getting underway.

The Indian conglomerate said on Aug. 28 that it will start work in October on the Carmichael coal mine in Queensland state, initially using A$400 million ($317 million) of its own funds. There is no reason to doubt Adani intends to do exactly what it said it was planning to do by starting to build the $4 billion mine, with a goal to ship coal by 2020.

But there are several reasons to be sceptical about the timing of the announcement, and perhaps about its motivations. It would be a brave board of company directors that approved spending hundreds of millions of dollars when there is still considerable uncertainty over the future of the overall project.

The Carmichael is slated to cost $4 billion in just its initial phase, consisting of a 25 million tonne a year mine, and a near 400 km (240 mile) railway to an existing export harbour.

This is scaled back from a $16 billion mine to produce 60 million tonnes of thermal coal a year, although Adani says it still aims to build Carmichael up to this capacity eventually.

Even the current plan for 25 million tonnes a year would make Carmichael the biggest coal mine in top exporter Australia, as well as the largest coal-mining project underway globally.

For the rest of this column: https://www.reuters.com/article/column-russell-coal-adani-ent-idUSL4N1LF27R

 

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