Adani’s port, mine and rail project in North East Australia suffered a double blow this week. A court overruled a government go ahead for its Carmichael mine and Australia’s biggest bank withdrew funding support.
On 5 August the Federal Court upheld a challenge by a local environmental group against government approval for the mine in the Galilee Basin. The court found the minister did not properly consider advice over two vulnerable species. The following day, 6 August, a divestment campaign run by another protest group contributed to the Commonwealth Bank, Australia’s largest lender to resource projects, withdrawing support for the project.
In a media statement posted 5 August Adani said it was “committed to ensuring its mine, rail and port projects in Queensland are developed and operated in accordance with Commonwealth and State laws and regulations, including strict environmental conditions,” Adani said it was confident the conditions imposed on the existing approval were “robust and appropriate once the technicality is addressed.”
However Adani stressed it was in its fifth year of development and approvals “and the need to finalise these approvals and timelines is critical.”
The multi-billion-dollar project still has government support with the Australian Prime Minister who today described the setback as “tragic”.
Speculation is mounting that the project may never go ahead as the price of thermal coal plunges and economists debate whether the commodity may be a structural decline.
The International Energy Agency predicts an increase in demand of 40-50% over 20-30 years. However the Institute of Energy Economics and Financial Analysis believes India’s imports of thermal coal will peak this year at about 192 million tonnes before following China and falling to zero by 2021.
Also weighing in on any Adani management decision on whether to stick with the project is a new Indian government policy favouring domestic coal and investment in renewables.