Adani: All hands on deck

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 22 Sep 2017   Posted by admin


BY CAMERON DRUMMOND

 

THE Carmichael coal, rail and port project will purportedly make up just one third of Adani’s total investment into Australia by 2022, with the Indian mining giant earmarking 1500MW worth of renewables projects and a 1 million tonnes per year agribusiness export mechanism.

 

Construction works have started this month on Adani’s mammoth $16.5 billion Carmichael coal mine, rail and port project, two months after company chairman Gautam Adani gave the operation the green light.

The massive undertaking has come under intense scrutiny by environmentalists, as well as the State and Federal politicians since it was brought to the table six years ago.

However, Adani persevered through a myriad of red tape and court appeals, confirming in late August it would commence major construction works in October.

Once developed, the Carmichael mine will be able to extract more than 2.3 billion tonnes (t) of coal over a 60 year mine life, equivalent in size to the United States’ largest coal mine – Peabody Energy’s North Antelope Rochelle in Wyoming.

Carmichael has approvals to extract 60 million tonnes per annum (mtpa) of coal each year, however phase one – to be completed by 2020 – will have an initial production rate of 25mtpa.

$3.5bn has been invested into the project to date, including the purchase of the bulk handling facility at the port of Abbot Point.

A further $3.5bn will be invested by 2020, with another $8.5bn over the next 10 years.

The combined mine, rail and port operations are expected to provide 10,000 direct and indirect jobs, as well as unlock the development potential of other proposed mines in the coal-rich Galilee Basin.

 

Project updates

On 6 July, Adani gave the green light for the development of the Carmichael project.

“This is the largest single investment by an Indian corporation in Australia, and I believe others will follow with investments and trade deals,” Mr Adani said.

“We have been challenged by activists in the courts, in inner city streets, and even outside banks that have not even been approached to finance the project.

“We are still facing activists. But we are committed to this project.

“We are committed to regional Queensland and we are committed to addressing energy poverty in India.”

One of those activists was Adrian Burragubba, who led a splinter group of the Wangan and Jagalingou people – one of the traditional owners of lands to be accessed by the Carmichael project – asking for a judicial review of the granting of the project’s mining lease.

However, on 22 August the Queensland Court of Appeal upheld the State Government’s approval of the mining lease and awarded costs against Mr Burragubba.

An Adani spokesperson said it welcomed the decision as it “represented yet another independent judicial decision upholding nearly eight years of development planning and rigorous approvals, and dismisses activist claims to the contrary”.

“Mr Burragubba suggests he is acting on behalf of the Wangan and Jagalingou (W&J) community, but the W&J people voted by 294–1 to support an Indigenous Land Use Agreement with Adani,” the spokesperson said.

“It is also another legal rebuff to activists’ use of the courts to seek to delay a project that will create 10,000 direct and indirect jobs, including a minimum 7 per cent of jobs going to traditional land owners covering the almost 400km long strip from Abbot Point to central western Queensland.

“The most likely people to be harmed now by further law fare by Mr Burragubba is not the project which has considerable momentum, but the right of the majority group to realise a benefit.”

Other traditional owners had given their support to the project.

Six days after courts upheld the approval of the mining lease, Mr Adani confirmed an October start for construction, with first coal to be produced by the facility in March 2020.

Adani Australia head Jeyakumar Janakaraj said Charters Towers-based civil contracting firm GA Services would be among the first regional contractors to benefit from the start of works.

 

“Adani Australia’s regional content initiatives will have long-term benefits for Queensland, particularly for contractors like GA Services who help us meet our Indigenous content targets,” Mr Janakaraj said.

 

Adani said it was committed to providing more job opportunities for regional QLD.

“Actions speak louder than words; we have opened our regional headquarters in Townsville – the first major mining operation in Australia with a regional headquarters instead of basing our project in a capital city,” Adani spokesperson Ron Watson said.

“We also have an online registration for people looking to work, with more than 9000 people registered and companies advertising their services through our online work portal.

“We are not just advertising jobs for our project, but are scanning other job opportunities that arise from the region and putting them on our website free of charge.”

“We are also proposing to have a port and rail operations centre and rail maintenance yard at Bowen up and running within the next few months.”

Mr Watson said Adani would also soon announce where to base its fly-in fly-out hub for the project.

“We are very close to a decision on our FIFO hub as we gear up to get workers to and from Carmichael’s project areas,” he said.

“This is a major project in terms of size and value, and we are all hands on deck moving the project forward, with broad smiles all around.”

 

 

 

Funding

A report by energy analyst Tim Buckley from anti-coal research group the Institute for Energy Economics and Financial Analysis (IEEFA) said there was still doubt over whether the mine was even viable.

“All of my financial analysis over the last four years says the mine is neither financially viable nor strategically required or justified,” Mr Buckley said.

“Financial closure is going to be a major obstacle, I have absolutely no doubt.”

Mr Watson said he didn’t understand people who were quoted saying the project was not financially viable.

 “When we received the FID from the board in June, not only did that give us the ‘green light’, it also injected $400m into our coffers through equity funding to start the project with,” Mr Watson said.

“We are close to our financial close for the project and are expecting to realise a complete funding package by March next year.”

Part of that financial close would likely come via the Federal Government’s Northern Australia Investment Fund (NAIF) – a $5bn scheme to encourage and finance private sector investment in economic infrastructure that benefits Northern Australia to which Adani had applied.

Earlier this year, the QLD Government said it would not stand in the way of Adani receiving funding from the NAIF.

“We will not stand in the way of those arrangements [and] in the case of the Carmichael mine, any funds will pass directly from the Federal Government to Adani,” QLD Treasurer Curtis Pitt said.

Mr Watson said once Adani had received commercial investment commitments it would have a better idea of how much it would require from the NAIF.

“The funding gap will be realised once we finalise funding from the international market – at this stage a figure for funding from the NAIF has not yet been determined,” Mr Watson said.

“Numbers being thrown around in the media such as $900m, or $1bn, simply aren’t accurate at this stage.”

 

Other Australian projects

The central western QLD coal mining town of Moranbah will soon boast a $100m, 65MW solar energy plant, marking Adani’s first foray into the Australian renewables sector under subsidiary Adani Renewables.

The Rugby Run solar farm will be built on a 600 hectare block that was part of the Rugby Run grazing property – and is expected to use the latest mono-PERC technology and single axis tracking systems developed to improve efficiency and output.

Further stages are planned to take the generation capacity up to 170MW.

The Rugby Run Solar Farm is expected to be completed over a 12 month period with a workforce likely to peak at up to 150 employees during construction.

Upon receiving development approval from the Isaac Regional Council on 12 September, Adani Renewables chief executive Jennifer Purdie said work would start on the first stage of the solar plant by the end of the year.

“This is an exciting project in terms of its size, location, and the technology we are using,” Dr Purdie said.

“This will be Adani Renewables’ first project – the first of many – and we thank the Isaac Regional Council, in particular Mayor Anne Baker and her officers for their assistance and encouragement.”

Isaac Regional Council mayor Anne Baker said the council supported responsible industry development which genuinely engages with all stakeholders.

“We are excited to welcome Rugby Run Solar Farm as the first renewable energy project in the region,” Mayor Baker said.

“This project continues to diversify our local economy, and will contribute towards a sustainable future for both Isaac and the state.

“We look forward to the employment opportunities and long-term benefits that Rugby Run will deliver to our communities.”

Adani said prep work, including heritage surveys and engineering design had commenced and orders for critical equipment were under way.

It also executed the initial stage of works to expedite a network connection application with Powerlink to feed into their existing network supplying the State.

Adani said it was the first of a number of solar projects to be developed in Australia and had earmarked a total capacity of 1500MW within the next five years.

“The objective is to be the largest solar power generator in Australia by 2022,” Mr Watson said.

“Solar plays a big part for Adani as we are already the largest provider in India, which includes the world’s largest single site solar generation plant at Tamil Nadu in southern India which has a capacity of 648MW.”

The company has constructed 793MW of solar plant in India to date, with a further 1225MW in the construction or late development phase.

Mr Watson said Adani’s strategy within the next five years would see the company’s $16.5bn investment in the Carmichael project represent just one-third of the company’s operations in Australia.

“The rest will be divided between renewables – particularly solar – and agribusiness which will represent the export of about 1 million tonnes of pulse crops each year.”

“We are currently in discussions with a number of agricultural areas – particularly in QLD’s Central Highlands and Darling Downs regions.”

 

 

Mine 

160km northwest of Clermont in Central QLD’s Galilee Basin, the Carmichael coal mine will be Australia’s largest thermal coal operation. [Medium font]

 

Built on the world’s largest single coal tenement

Six open cut pits and five underground mines

25mtpa Phase One production by 2020

60mtpa at full production

 

 

Rail

The Carmichael Rail Project will transport coal from the Galilee Basin to the Port of Abbot Point via a 388km multi-user standard gauge rail line, providing an alternate and shorter route to Abbot Point compared to the existing narrow gauge system via Moranbah. [Medium font]

 

40mtpa Phase One capacity by 2020

100mtpa at full capacity

Coal trains up to 3.97km in length and 31,964- tonne gross weight

Optimised for 3 diesel locomotives and 220 bottom discharge hopper wagons

23,760 tonnes of coal transported in a round trip of under 24 hours

 

 

Port 

Adani’s expansion of its owned and operated bulk coal facility at Abbot Point will boost throughput capacity from 50mtpa to 120mtpa, making it the world’s largest coal export facility. [Medium font]

 

New T0 coal export terminal adjacent to Abbot Point’s existing T1 terminal

Increase of up to 70mtpa total port export capacity

Rail loading facilities

2 new ship berths 3km offshore