December 29, 2017 Read More →

Australia’s Biggest Mine Faces Fresh Hurdles

Nikkei Asian Review:

The collapse of a 2 billion Australian dollar ($1.54 billion) deal between Indian mining giant Adani Group and a local contractor on the operation of Australia’s largest-ever mine is the latest setback for the troubled project.

Adani said on Dec. 18 it has canceled plans to outsource operations for the Carmichael coal mine to Australian contractor Downer to slash costs for the controversial project in remote central Queensland.

The industry behemoth, led by Indian billionaire Gautam Adani, said it will take charge of operations itself to ensure “flexibility and efficiencies in the supply chain,” after the Queensland state government vetoed a A$900 million federal loan for the project.

Queensland Premier Annastacia Palaszczuk, a member of the center-left Labor Party, has said she supports the development, which includes a 189km rail line, but that it should not be funded by taxpayers.

Despite Adani’s assurances, the latest hitch has raised fresh questions about the future of the mine, which has been dogged by controversy over its economic viability and environmental impact.

“It certainly increases the risk that the project is going to be considered unbankable by global private financial institutions,” said Tim Buckley, analyst at the Institute for Energy Economics and Financial Analysis. He noted that Adani has been relying on the promise of public funding to make the development appear less risky to private investors.

“Public funding now looks increasingly difficult to get, but I would never want to bet against a billionaire,” Buckley added.

Australia’s biggest mine faces fresh hurdles

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