Home >Companies >News >Australian court orders Adani Abbot Port to pay $106 million over port dispute

Adani Australia has been ordered to pay $106.8 million to four coal companies over a contractual dispute regarding access and terminal handling charges for the Indian business group’s Abbot Point coal terminal in North Queensland, local media reported.

In a judgment released by the Queensland Supreme Court in Brisbane late on Thursday, the court found that Adani had not offered "reasonable charges" for access to the port between July 2017 and July 2018, Australian Financial Review reported.

In 2016, a Rio Tinto-owned company, Queensland Coal, had negotiated an agreement to assign its rights to export coal from the port to Adani’s mining arm from 2022, for which Adani had been paid a total of $255 million by Queensland Coal. Four coal companies - Lake Vermont, QCoal, Byerwen Coal and Sonoma Mine – alleged that after signing this deal, Adani increased user and handling charges for other companies, placing its own interests above those of other port customers.

The court judgement found that “the port is in practical effect, a facility shared and paid for by all the users, although not under their control and that the monopolistic nature of Adani’s ownership placed users in a position of economic vulnerability," The Guardian reported.

Adani Australia may also rebrand the Abbot Point Terminal and its holding company as the North Queensland Export Terminal, The Guardian reported, as it tries to rebrand the highly contentious coal mining project.

In response to a query from Mint, a Adani group spokesperson said, "Adani Abbot Point Terminal Pty Ltd will carefully consider the judgment delivered by Justice Dalton of the Supreme Court. The decision concerns a dispute between the company and four of its commercial customers relating to terminal handling and access charges at the Abbot Point Port. Whilst respecting the judgment of the Supreme Court, the matters in dispute between the parties are complex and AAPT in conjunction with its legal advisers will review Her Honour's reasons and consider the company's rights of appeal."

Adani Australia owns and operates the Abbot Point Terminal, on the country’s eastern coast, under a 99-year leasehold granted by the state of Queensland in June 2011. The port is one of only three coal ports located within 200 km of the Bowen Basin, one of Australia’s major coal provinces. Adani Australia’s Carmichael Mine and Rail project is a 10 million tonne per annum coal mine and 200km rail line under construction in regional Queensland.

Building the open-cut mine and rail network is expected to cost the group A$2 billion, or about 10,000 crore, Mint reported in June 2019.

Local protests over the last eight years forced the Adani group to reduce capital outlay for the project and the annual capacity (from 60 tonnes per annum initially to 10 tonnes per annum now). The group also cut short the length of the rail line and decided to fully fund the construction from its own resources, when government subsidies and local lending plans were withdrawn.

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