Adani cleared for mega-mine expansion to 60 million tonnes

Adani certified to expand new Carmichael coalmine into mega-pit, producing six times the volume.

Chief executive of Adani Lucas Dow at a media conference in Brisbane. Picture: Mark Cranitch.

India’s Adani group has been certified to rapidly expand its new 10 million tonne Carmichael coalmine into a mega-pit producing six times the volume of ore, vastly increasing the controversial project’s environmental footprint.

Speaking a day after Queensland’s Labor government ended nine years of delay and ticked off on the last major environmental permit, the company’s Australian chief executive, Lucas Dow, ­revealed the “original configuration” had been approved by state and federal regulators, not the downsized mine it went with after failing to secure finance for the project.

Asked if production could be lifted to the annual 60 million tonnes of thermal ore initially envisaged by Adani, Mr Dow told The Weekend Australian: “Absolutely. We were permitted, the rail has got the capacity and is expandable … so there is clear opportunity to be able to grow. Ultimately, that is a question for the board.”

The veteran mining executive, who formerly headed the BMA joint venture between BHP Billiton and Mitsubishi that accounts for a quarter of Australia’s coal ­exports, rejected persistent claims that most or much of the output would be sold on the international spot market, potentially feeding a glut.

Mr Dow insisted that in the start-up phase at least 90 per cent of the 10 million tonne annual production would be shipped to India to supply power stations ­operated by Adani. “Within the Adani group we are a large power generator and consumer of coal so we have got, if you like, our offtake secured with that,” he said. “Now, whether the entire amount goes into Adani Power or some of it is traded, the market will dictate. But the key thing from the mine perspective is that we have got the security in terms of our market ­requirements.”

The central Queensland mine was dramatically scaled back last November, from a development cost of $16.5 billion to $2bn, after Adani announced it would go it alone in funding the project.

Staff in the company’s Brisbane and Townsville offices are now working overtime to lock in contractors, a construction force and the logistics chain needed to start work proper on the remote site near Alpha, 1000km northwest of Brisbane. Ground could be broken by the end of the month, Mr Dow said.

New details show the open-cut will be 25m deep after the first year of construction and measure 0.85km by 0.48km, requiring the removal of 7.2 million cubic ­metres of rock and soil. Exports are expected to begin at the end of year two.

By year four, the pit will be 2.5km long and 125m deep, and Mr Dow said it was possible production would exceed 10 million tonnes. “The original configuration had a similar construction period and hitting a volume around 27.5 million tonnes … nominally in a 2½, three-year timeframe,” he said.

The Queensland Department of Environment and Science, which signed off on the critical groundwater management plan on Thursday, last night confirmed the mine was approved to up to 60 million tonnes a year.

The ramp-up came as protest leader Ben Pennings warned contractors would be targeted individually by anti-Adani activists. This follows their claimed success in pressuring mining services firm Downer to withdraw from a $2.6bn deal to take the lead in construction.

Wary of attracting protests, the Tweed Shire Council on the Queensland-NSW border has updated its procurement policy to force contractors to declare any involvement in the mine.

Mr Pennings, a ranking figure in the so-called Galilee Blockade, made no apology for going after companies doing business with Adani. “A replacement hasn’t been announced (for Downer) and Adani can’t do it themselves,” he said. “That contractor will have to be a very, very brave company because they must know there is going to be many, many Australians all around the country targeting their business.”

Adani hit back last night, warning it was wrong for protesters to take action that put people at risk. “Everyone is entitled to their own opinion,” a company spokesman said. “We encourage people to base their opinion on the facts and to conduct any protest activity legally and safely, without putting themselves or our employees at risk.”

Mr Dow said the Carmichael mine would be the linchpin of the emergent Galilee coalfield, with other operators to be allowed ­access to the 200km rail spur now under construction to link with a narrow gauge network operated by Aurizon, the privatised former freight arm of Queensland Rail. “It is third-party open access,” he said. “Effectively, the schedules have been aligned so that when the rail is ready to roll, the mine is … up and we are away.”

The opposition Liberal ­National Party in Queensland ­announced this week it would fast-track development of other Galilee mines — one of them proposed by Clive Palmer — if it won next year’s state election.

Mr Dow said the nine-year delay in getting the mine ­approved was a missed opportunity for Australia, costing jobs and economic opportunity.