Is it time for Adani Mining to raise the white flag on its Carmichael project?
The hits just keep coming for Adani Mining and its controversial Carmichael coal mine in Queensland, Australia.
The Guardian reported yesterday the company has stopped engineering work on the $16.5 billion project, advising four major engineering contractors to stop work around the mine including the joint venture rail line and expansion of Abbot Point port.
According to the Guardian report, it makes no sense halting work at this stage even as a savings measure, raising speculation the company is preparing to scrap the massive project.
Tim Buckley of the Institute for Energy Economics and Financial Analysis said to stop work at this stage “just crucifies the project, it all goes out the window”.
“The minute Adani stops moving forward, the project is just dead, in my view,” Buckley said. “And the reason is you’ve got billions of dollars of debt in Australia and they’ve got this interest bill.
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“They’ve been drawing a line in the sand and that is that they need financial close by October 2015.”
Adani Mining released a statement supporting its commitment to the Carmichael project:
"For the past six to 12 months, Adani has maintained a level of investment, jobs and sub-contractor engagement for its mine, rail and port projects in anticipation of finalising approvals and decisions. The project budget was based, understandably, on these anticipated approvals timelines and milestones," the company said in a statement.
"As a result of changes to a range of approvals over that time, it’s necessary to synchronise our budget, project timelines and spending to meet those changes. Adani has made a commitment to build a long term future with Queensland that will deliver 10,000 jobs and $22 billion in royalties and taxes that will be reinvested back into community services.
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"However, it is important to note we are now into the fifth year of development and approvals and therefore the need to finalise those approvals and timelines is critical."
To add insult to injury, a new report by the Climate Council says coal mining in the Galilee Basin – the Carmichael coal mine location -- is not environmentally or economically sustainable.
“If we’re to stay in within carbon budget and avoid dangerous climate change, we can't have any new coal developments anywhere around the planet,” said Professor Tim Flannery, chief councilor and co-author of the report.
“In fact we're going to have to close prematurely a quite a number of coal mines if we were to stay within that budget.
“So economically it doesn't make sense, and analysts say they can't see a recovery in the coal price for years into the future, so economically the mine doesn't make sense and as I said environmentally it doesn't make sense either.”
Since its inception the Carmichael coal project has faced a wide array of criticism from environmentalists and Indigenous Landholders. Heightened pressure to protect the Great Barrier Reef has caused major roadblocks for the project as well as mounting lawsuits.
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