Adani Mining has signed up buyers for around 70 per cent of the coal it plans to produce from a huge mine in Australia, putting it a step closer to being able to seal funding for the A$10 billion ($7.9 billion) project, its local head said on Thursday.
The key hurdle Adani needs to clear to secure loans for the Carmichael mine, rail and port project is dredging approval to expand its Abbot Point port. Australia’s environment minister is expected to rule on that in the second half of this year.
“We have signed contracts for most of the production,” Adani Australia CEO Jeyakumar told Reuters. “Financial close is tied to dredging approval.”
The mine in the untapped Galilee Basin in the state of Queensland is due to produce 40 million tonnes a year in its first phase, with Adani aiming to secure funding by the end of this year and start production in late 2017.
Green groups are fighting the Carmichael project in every forum possible, targeting banks not to provide loans and urging UNESCO to put the Great Barrier Reef on the in-danger list, citing potential damage to the reef from port dredging, coal shipping, and climate change stoked by coal from the mine.
One group, called Coast and Country, has urged the Land Court in Queensland to recommend that the state government should not grant Adani a mining lease, arguing that the mine will not be viable, will not create as many jobs as the government believes, and will damage the environment.
The Land Court’s ruling, expected later this year, would not be binding on the state government, which wants Adani’s project to go ahead to help boost the state economy as it has been hit by a slump in the coal industry.
Analysts say the project would only be profitable if energy coal prices were trading above $100 a tonne, well above current prices around $60. But Adani is ploughing ahead, given it has customers in India, including its own power plants, and customers in South Korea and China.