Indian conglomerate Adani has suspended engineering work on the Carmichael project, raising speculation it could pull out
(Flickr/ Eye weed)
By Megan Darby
A controversial coal mining project in Australia is reportedly hitting the buffers amid low coal prices and regulatory delays.
Indian conglomerate Adani has halted engineering work on the US$16 billion Carmichael scheme, the Guardian revealed this week.
An Adani spokesperson said the company remained committed to the project and blamed delays in securing regulatory approval – charges the Queensland provincial government denied.
Low international coal prices were also hurting the economics, sources told the Times of India, while management “is wary of relentless attacks by Greenpeace”.
Opposition is intensifying to the mega-mine and its related rail and port infrastructure, over its projected impacts on the climate and local environment.
At full production, Greenpeace estimates Carmichael coal will generate 128 million tonnes of CO2 a year, more than the fossil fuel emissions of Sweden, Denmark and Norway combined.
Scientists calculate more than 90% of Australia’s coal must stay in the ground to limit global warming to 2C, the internationally agreed goal.
Yet the Australian government emphasised the importance of coal to the country’s economy in an early draft of its contribution to a global climate deal.
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Meanwhile, the proposed Abbot Point port expansion will increase ship traffic near the Great Barrier Reef, a sensitive coral ecosystem.
The price of coal has dipped in recent years as a result of lower than expected demand growth from China.
That might not have mattered to Adani, which was earmarking the Carmichael coal for its own fleet of power stations in India.
But the corporation split off its mining and power operations in a recent restructure, leaving the mine to stand or fall on its own merits.
Analysts at the Institute for Energy Economics and Financial Analysis (IEEFA) said this made the prospect of attracting finance for the project “increasingly remote”.
Adani dismissed IEEFA as “anti-mining activists”, saying its analysis was flawed.
Responding to the latest reports of delays, Adani said in a statement: “We are now into the fifth year of development and approvals, and therefore, the need to finalize those approvals and timelines is critical… the project budget was based, understandably, on these anticipated approval timelines and milestones.
“As a result of changes to a range of approvals over that time, it’s necessary to synchronize our budget, project timelines and spending to meet those changes.”