Australia’s Adani Coal Mine Nears 1st Shipment, Despite Climate Activists’ Campaign

MELBOURNE – India’s Adani Group is preparing to ship the first coal cargo from Australia’s most controversial mine, after battling a seven-year campaign by climate activists and defying a global push away from fossil fuels.

The Carmichael mine in outback Queensland state is likely to be the last new thermal coal mine to be built in Australia, the world’s biggest coal exporter, but will be a vital source of supply for importers such as power plants in India.

“The first shipment of high-quality coal from the Carmichael mine is being assembled at the North Queensland Export Terminal in Bowen ready for export as planned,” a spokeperson for Adani’s Australian subsidiary Bravus Mining & Resources said in a statement.

The statement did not say where the shipment was headed, except that “we have already secured the market for the 10 million tonnes per annum of coal that will be produced at the Carmichael Mine.”

When Adani bought the project in 2010, it envisioned building a 60-million-tonne-a-year mine with a 400-km (250-mile) rail line for around A$16 billion ($11 billion), one of several projects planned in the then untapped Galilee Basin.

It shrank the mine plan in 2018 to 10 million tonnes a year following a sustained “Stop Adani” campaign by green groups, which scared off lenders, insurers and major engineering firms.

“That sharpening of the plan has kept operating costs to a minimum and ensured the project remains within the first quartile of the global cost curve,” Adani’s Australian CEO Lucas Dow told Reuters in emailed comments.

The company has not disclosed the cost of the smaller mine and a 200-km rail line it built tying into an existing railway, but the project has been estimated at A$2 billion ($1.5 billion).

“It is quite a celebration because this is going to be the last true greenfield thermal coal mine in Australia,” said Lloyd Hain, managing director of consulting firm AME Group.

Climate activists, concerned about carbon emissions and potential damage to Australia’s Great Barrier Reef – both from global warming and dredging at Abbot Point port – brought several cases challenging government approvals for the mine.

Their campaign turned into a lightning rod at Australia’s last election in 2019, in a jobs versus the environment fight which saw the coal-supporting conservative coalition government re-elected when it was expected to lose.

While activists succeeded in delaying the project for seven years and even leading Adani to change its local name to Bravus, they are not claiming victory.

“It’s a shame that the mine’s still going to go ahead. But just because the mine’s open doesn’t mean all the coal in the ground is going to come out. We will continue to campaign to keep as much in the ground as possible,” said Andy Paine, who chained himself to Adani’s rail line several weeks ago.

All About the Port

The coal will be exported from a terminal at Abbot Point, which Adani bought for $2 billion in 2011 and renamed North Queensland Export Terminal.

Analysts said it made sense for Adani to dig the mine to help it make back the massive investment on the coal terminal, which has run nearly half empty since Adani acquired it.

“It’s about maximizing your cash flow returns on the railway line and maximizing your profits on Abbot Point,” said Tim Buckley, a director at the Institute of Energy Economics and Financial Analysis (IEEFA).

He said even though the Carmichael mine will become unprofitable as coal prices fall, Adani might have an incentive to expand it to 20 million tonnes a year to keep the port filled, when other mines supplying the terminal stop producing.

($1 = 1.3816 Australian dollars) (Reporting by Sonali Paul; editing by Raju Gopalakrishnan)

Topics Australia