Gautam Adani hopes to start USD 22 billion Carmichael coal mine by August
Mumbai: Adani Group Chairman Gautam Adani, whose USD 22 billion Carmichael coal mine and port cum railhead project in Queensland is being opposed by some people, says he is hopeful of starting it by August this year.
"We expect the final federal approvals by May-June. We need just about three months from thereon to actually begin the work on the mine. Which means we can kick-start work from August this year," Adani told PTI in an interview here over the weekend.
He was flanked by the premier of Queensland Anastasia Palaszczuk, who was in town leading a 25-member delegation of mayors and state officials after visiting the Mundra port and solar power farms of the Adanis in Gujarat over the weekend.
Adani said he expects the first coal to come out of the mines by 2020. The company has nearly halved the first phase of mining project to 25 mt per annum from the original plan of 40 mt, he said.
The Adani group entered Australia in 2010 with the purchase of the greenfield Carmichael coal mine in the Galilee Basin in central Queensland, and the Abbot Point port near Bowen in the north.
Echoing Adani's confidence, the premier sounded sanguine about securing the pending federal approvals anytime soon as her country's national parliament is in session now and is keen to begin a debate on the project.
"Most of the approvals are in. There is no approval pending from my government. Some legislations are currently before the federal parliament," she said. "I don't believe there will be any obstacles for that final piece of legislation in the federal parliament and the environmental conditions have been attached as well," Palaszczuk said.
The support for the investment in Queensland comes just days after Australian cricket legends Ian and Greg Chappell and scores of other prominent Aussies urged Adani to abandon the USD 21.7 billion project.
The company, however, rejected the demand as "a motivated attempt by a very small group of 76 misled people." The open letter, dated on March 16, cited public opposition, risks to miners' health, climate change and potential impact on the fragile Great Barrier Reef as reasons for their request not to proceed with the project in the Galilee Basin.
The letter warned that the project could hit the bilateral relationships, especially on the sporting and trade front. The USD 21.7 billion Carmichael coal mine and port-cum-railhead project is said to be one of the world's largest and has already received the green light from the federal and Queensland governments.
The project involves dredging 1.1 million cubic metres of soil near the Great Barrier Reef Marine Park, which will then be disposed of on land. Asked for her reaction to the letter opposing the project, Palaszczuk quipped, "Those who are writing such letters have good jobs. I know how tough the people are doing in my state."
"We have had some closure of companies like Queensland Nickel, and the Clive Palmer's. With the downturn in the resources industry I have had other mine closures," she said.
"This project is not just a sign of confidence in Queensland. This project by the Adanis is a sign of confidence in regional jobs for families. It will give them such a boost. And all the mayors have commented about that on this trip," the premier said.
She said the Adanis have committed to create 10,000 direct jobs and many thousands indirectly. Strongly backing the project, Palaszczuk, however, refused to set a time-line for the project, saying "that's a matter for the federal parliament. I understand that we are
getting a report back today (last Friday when the interview took place)."
"So, hopefully they will be able to debate it. I know it's very hot on my Prime Minister's agenda. So I am quite sure they will debate it as soon as they possibly can," the premier said.
She also said that the federal parliament will sit in the near future to get the piece of legislation through as the project is a high priority for them. Asked if her government is ready to offer any warranty for the project against public protest even after the final federal approvals, Palaszczuk said the Australian laws do not provide any such provisions by a state but the federal government can do that.
"Also, there is a legislation pending with the federal parliament in this regard which will insulate large infrastructure projects from public disruption. That federal legislation is before the national parliament at the moment," she said.
"It's been introduced and so that will be debated. But that is the sphere of the federal government and not the state government. So the project is happening in Queensland which I fully support. My government fully supports it," she said.
"I have brought eight regional mayors with me here to India to show our support. We have had a fantastic meeting today (March 17), and tonight with Adani and the board members," she said. Lauding the Adani group for its great prowess in building world-class infrastructure, the premier said, "I thank Adani for showcasing to us the depth of diversity of his group in relation to our solar project as also the edible oil business."
"The scale of his Mundra port is something I have never seen in my lifetime. I have been to ports in Japan and across Australia. But this port is a true testament to the Adani Group's ability to build world class infrastructure," she said.
Asked whether the Adanis have sought some infrastructure loan from the state, she said, "Yes but this (concessional funding worth ASD 5 billion) again is through the federal government and is available to any company willing to invest in Northern Australia, and not just Adani."
On how much funding they are looking at, Adani Group's Australia chief executive and country head Jeyakumar Janakaraj said though the group is eligible for 50 per cent of the debt amount or ASD 800-900 million.
He said they are going to tie-up with commercial banks for most of the loans and only leftover or the maximum 50 per cent of this facility will be drawn upon. "We will mostly look at the export credit agencies (ECAs) from China and Korea, from where we will be buying machinery for funds.
We will tap banks only for the remaining amount," Janakaraj said. As an explanation, he said some banks have been misled by environmental groups (SBI had backed out of an Rs 8,000 crore commitment after protest by opposition parliamentarians in December 2015).
"And that is the main issue. We have already invested ASD 3.3 billion?all equity into this project which includes port and the mine. Rest of the debt funding is required mainly
for the rail infrastructure which is ASD 2.5-2.7 billion," Adani said.