Australia Approves Adani’s $15.5 Billion Carmichael Project… Just in time for PM Tony Abbott to Visit India

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Just weeks before Australian Prime Minister Tony Abbott’s first visit to India, the Australian government, earlier in the week, conditionally cleared a long-pending coal mining project from India’s Adani Group, sparking protests in Australia.

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Australia approved the approximate $15.5-billion (AUS $16.5 billion) Carmichael coal project in Queensland that could yield up to 60 million tons of coal per year, but only after imposing “strict conditions to protect the environment.”

Australian Environmental Minister Greg Hunt said in a statement reported in many Indian newspapers that the decision was taken after “undertaking a thorough assessment and consideration under the national environment law.”

The Carmichael Coal Mine and Rail Infrastructure project was subject to Adani meeting 36 conditions. Hunt added that “the absolute strictest” of conditions had been imposed to ensure environmental protection with a focus on groundwater preservation.

Clearly, there were signs of this announcement coming. Some months ago, the Adani Group had threatened to pull out of the project if the required sanctions did not materialize soon. Then, on July 17, the Australian Parliament repealed a 2011 carbon tax to limit pollution, helping coal exporters, including the Adani Group, ship coal overseas at lower cost. The Prime Minister is also known for his pro-mining stance, and has been its biggest Australian voice for employment creation and economic growth.

The Adani Group, in response to the clearance, said it was committed to adhering to the strict regulatory and environmental approval processes.

In India, the Australian Government’s decision is being viewed as a major achievement for Adanis, as the much-needed coal will now be available for use in steel production. It will also propel the Adani Group — perceived to be close to Indian Prime Minister Narendra Modi in some quarters here as both Gautam Adani, Group Chairman, and Modi hail from the Indian state of Gujarat — into a different league. MetalMiner, had, in May, reported how Adani was one of India’s fastest growing conglomerates and Modi’s election was thought to be good for the conglomerate.

The author, Sohrab Darabshaw, contributes an Indian perspective on industrial metals markets to MetalMiner.

Comments (3)

  1. Peter Kean says:

    Rather than rehashing PR statements, maybe you could comment on the reality of the abilty for Adanis to execute this project. There is over 500 km of rail and other infrastructre to be built into a very isolated area and by several reports, the organisation is already severly leveraged in the execution of projects in India???

  2. Jeff Yoders says:

    Sohrab Darabshaw responds: “To begin with, this is a major news development that has to be reported, especially where Australia and its coal reserves are concerned. So there’s no question of sounding PRish. In so far as Adanis’ ability to execute the project is concerned, well, they have bid for it, the Australian Govt seems convinced of their bid and capability, and from all existing signs, Adanis plan to go ahead with it. The Group has already outsourced the railway line project to Posco Engineering & Contruction Co of South Korea. This and other points related to this development appear in Part 2 of the report to be published on MetalMiner soon.”

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