Adani lines up $1bn for Australia’s Carmichael coal complex
Indian mining giant Adani has signed a deal with the State Bank of India (SBI), which will extend a $1 billion credit facility to help build its $15bn (A$16.5bn) Carmichael Coal mine and rail project in Queensland's Galilee Basin.
The memorandum of understanding, subject to the detailed assessment of the company’s project, came on the same day the Queensland government promised to invest in the mine, considered Australia’s largest thermal coal project ever.
“The MOU with SBI is a significant milestone in the development of our Carmichael mine. It is a unique asset that lies at the heart of our investment in Queensland and Australia, and aligns perfectly with our clear vision for delivering energy security in the Indian market”, Adani Group chairman and founder, Gautam Adani said in a statement.
Pros and Cons
Designed to eventually produce 60 million tonnes of thermal coal a year, the mine —approved in July— has been the focus of opposition by organizations ranging from the United Nations to green groups fighting new coal projects in the area.
According to The Guardian Australia, the federal government recently scaled back the initial environmental conditions for the mine, which means that its impact on key groundwater supplies will be essentially unknown until the project is at an advanced stage:
More than 35,000ha of habitat, containing the endangered black-throated finch and the vulnerable yakka skink, will be flattened for the mine. Indian firm Adani was initially required to secure land elsewhere to compensate for this loss prior to construction, but will now not have to do this until two years after the project starts.
The port Adani plans to use, Abbot Point, it is supposed to be expanded, but conservationists oppose the idea as they say the project would dredge up 3 million cubic metres of sand and then dump it near the Great Barrier Reef.
Analysts argue that is the main reason why a number of international banks, including Citi, Deutsche Bank, Royal Bank of Scotland, HSBC and Barclays, have refused to back Adani’s project.
But the Queensland government is focused on the pros of this vast project. According to official estimations Carmichael will contribute $2.97bn each year to the state’s economy and has the potential to create 6,400 new jobs: around 2,500 construction positions and 3,900 operational posts.