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A file photo of Gautam Adani. Photo: Mint
A file photo of Gautam Adani. Photo: Mint

Adani Group secures approval for Australian coal project

Adani Group has secured three individual mining leases by Australia's Queensland state government for its controversial Carmichael coal project

Mumbai: Adani Enterprises Ltd on Sunday won mining leases for its $16-billion Carmichael coal project in Australia, moving a step closer to starting work at the controversial mine.

Adani secured three leases from the Queensland state government for the coal project which would be the largest in Australia.

On Sunday, Queensland Premier Annastacia Palaszczuk said the minister for state development and minister for natural resources and mines Anthony Lynham approved the grant of three individual mining leases about 160km north-west of Clermont.

“This is a major step forward for this project after extensive government and community scrutiny," the premier said in a statement posted on the government website.

“Some approvals are still required before construction can start, and ultimately committing to the project will be a decision for Adani. However, I know the people of north and central Queensland will welcome this latest progress for the potential jobs and economic development it brings closer for their communities," Palaszczuk said.

Adani has estimated the mine, rail and port project will generate more than 5,000 jobs at the peak of construction and more than 4500 jobs at the peak of operations.

The leases --- 70441 Carmichael, 70505 Carmichael East and 70506 Carmichael North --- are estimated to contain 11 billion tonnes of thermal coal. They provide for mining and the development of infrastructure such as haul roads, buildings, workshops, power lines, workers’ camp and pipelines.

“The mine’s environmental authority had about 140 conditions to protect local flora and fauna, groundwater and surface water resources, as well as controls on dust and noise. A further 99 stringent and wide-ranging conditions apply to the rail and port elements of the project," Lynham said.

Welcoming the announcement, Adani Group founder and chairman Gautam Adani said in a company statement: “Today is an important milestone in our company’s plan to build a long term future with Queensland, and Australia. This final key approval reflects the confidence both sides of politics, at both the national and state level, have in our commitment to delivering major projects that will help drive exports and jobs in Australia, while delivering energy security in India."

The statement said the company is confident the appeals will be positively resolved in 2016, because of the rigorous approvals process and conditions attached.

“That will then set the opportunity for final investment decisions and construction in 2017. The company will make additional announcements in the coming months regarding progress on the mine at Carmichael," the statement said.

In February, Adani Group had secured the approval of the Queensland government for the $16.5 billion Carmichael mine project in the state’s Galilee Basin, amid protests from environmental activists in Australia.

“It is grossly irresponsible of the Palaszczuk government to issue the paperwork for the Carmichael coal mine, which will create millions of tonnes of climate pollution for many decades to come, when we can see the Great Barrier Reef is already being savaged by climate change," said the Australian Conservation Foundation’s (ACF) chief executive officer Kelly O’Shanassy said on Sunday.

Securing a mining lease from the Queensland government was the next step.

Now, Adani needs to secure funding for this project amid a prolonged downturn in the coal market, making lenders wary of funding the project.

In December, Australia had allowed expansion of the Abbot Point coal terminal in Queensland, which will enable shipping of the fuel from mines in the Galilee Basin, including Adani Group’s Carmichael mine.

The expansion, which will see 1.1 million cubic metres of material dredged near the Great Barrier Reef, was granted approval with 29 riders. The approval follows an Australian court spiking a green group’s attempt to block the Carmichael project, and recommending mining leases in October.

Adani Mining Pty Ltd aims to develop the coal mine, which is expected to yield 60 million tonnes of coal a year. The company is building a 189km railroad to transport the coal.

Adani claims the mine project will also generate $22 billion in taxes and royalties.

On 15 October, Australia re-approved the Adani Group’s coal mine and rail project in accordance with the country’s environment laws, subject to 36 conditions. Australia’s environment minister Greg Hunt had then said that the approval is subject to “36 of the strictest conditions in Australian history".

“The Barrier Reef is loved by people all over the world for its beauty and diversity," ACF’s O’Shanassy said.

ACF has been opposing the Carmicheal coal mine for last several months. ACF is also challenging federal environment minister Hunt’s approval of Adani’s Carmichael project on the basis that approving the polluting coal mine is inconsistent with Australia’s international obligations to protect the World Heritage-listed Barrier Reef. The challenge will be heard in the Federal Court in May.

“By granting a licence for this massive coal mine, the Palaszczuk government is bowing to the demands of big polluters, not listening to the needs of the people. In February, the Queensland mines minister Anthony Lynham said he was reluctant to issue a mining licence to Adani while court cases challenging the mine approval were still to be heard," O’Shanassy said.

She said it makes one wonder whether the powerful coal lobby has leaned on the Queensland mines minister to issue Adani mining licences against his better judgement.

Minister Lynham said there would be no dredging at Abbot Point until Adani demonstrates financial closure and Queensland taxpayers will not fund infrastructure for the project.

Lynham said overall, the coal, rail and port project now had 19 permits and approvals at local, state and federal level, including nine primary approvals from the state and Commonwealth Government.

“A number of other steps have to be completed before mine construction can start," the minister said.

“They include secondary approvals for rail, port facilities, power, water, roadworks and the airport and a financial assurance with the Department of Environment and Heritage Protection. The independent coordinator-general will continue to work with Adani to progress the project," Lynham added.

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