Fossil Fuel Foes: Adani Cancels $1.5 Billion Australian Mine Contract After Failing to Secure Funding
An Indian group’s plans for a $12.7 billion coal mining project in Australia suffered another big setback Monday, as it lost its most important contractor, due largely to the lack of financial backing from a government more worried about environmental issues.
Adani Group, controlled by the billionaire Gautam Adani, said it will now plan to finance the vast Carmichael coal project on its own, but the company faces an uphill struggle as both governments and major banks adopt a harder line towards new coal projects, citing the impact of coal-fired power on climate change.
The planned Carmichael mine has inspired stiff resistance from environmental groups, who have warned about its two-fold impact on Australia’s Great Barrier Reef. Not only is the reef threatened by widespread bleaching as a result of rising ocean temperatures, but the project also requires the major expansion of the Abbot Point port in Queensland. Abbot Point lies squarely in the middle of the protected Great Barrier Reef Marine Park, and developing it would expose it directly to environmental degradation through dredging, fuel leaks and other shipping-related risks.
Last week, the state of Queensland had given in to pressure from environmentalists and refused to give the project a $690 million loan. On Monday, Adani said it had cancelled a contract with mining services company Downer.
The Financial Times noted that Adani has also tried, but so far failed, to secure funding from Chinese lenders. China itself is suppressing its appetite for coal, albeit more for reasons of pollution than climate change.
“Adani and Downer have mutually agreed to cancel all letter of awards [confirmations of successful contract bids] and Downer will provide transitional assistance until 31st March 2018,” said Adani in a statement reported by the FT.