Adani edges closer on Carmichael after slashing $1bn from rail costs
Adani has moved closer to starting work on its Queensland coal mine after slashing $1bn from planned rail costs.
India’s Adani has moved closer to a finance deal and construction start at the controversial Carmichael thermal coal project in Queensland after shaving $1 billion off the cost of its rail plan and as thermal coal prices remain robust.
Adani’s new local chief, former BHP coal executive Lucas Dow, said the giant mine, previously costed at $16.5bn, was now planning a 200km long narrow gauge rail line that would connect to the existing Aurizon Queensland coal network.
The new plan comes after Queensland Premier Annastacia Palaszczuk last year knocked back $1bn of Northern Australia Infrastructure Facility funding to the project and replaces a previous 388km standard gauge plan to the Abbot Point port.
The new rail plan is expected to halve the cost of what was previously a $2.2bn rail project.
“We’ve been working through closing a finance decision, and the decision on the rail has enabled us to be close to that,” Mr Dow told The Australian.
“As soon as we have that finance close sorted, we’ll be ripping into construction.”
Adani won’t give a time frame for construction start on the project.
Huge opposition to the coal mine from green groups has spilt into the broader community, particularly outside the region.
The pressure led Ms Palaszczuk to knock back NAIF funding during last year’s state election campaign and has raised questions about Bill Shorten’s attitude to the project after he this year said it did not stack up economically.
Mr Dow said there was a lot of support for the project in the regional centres of Rockhampton (where he today announced the new rail plans) and Townsville and across central and northern Queensland.
“All I would ever ask is opinions are based on facts,” he said of broader opposition to the project.
Mr Dow, who became Adani Mining chief in April, was asset president of the BHP Billiton-Mitsubishi Alliance (BMA) from 2013 to 2015 and brings big mining credibility to Adani’s local outfit.
He said Carmichael stood up economically and environmentally and that the recent strength in thermal coal price helped the project.
The Australian reported this week that thermal coal export values hit a record in July on higher prices that reached a 10-year high in Australian dollar terms that month.
“Any time we’ve got buoyant prices and weaker Aussie dollar, as an exporter, they’re good times to be in the market,” he said.
“But this is a robust project that will stand the test of time throughout the cycle.”
He said the cash costs, excluding capital, would make it among the lowest-cost 25 per cent of mines that could export coal to India, South East Asia and China.
“It stacks up economically and environmentally and we just want to get our ducks in a row and get on with it,” Mr Dow said.
The project has achieved primary environmental approval and is working through environmental management plans for some species that are normally developed in stages throughout projects.
