Adani abandons funding deadline for his Australian mine
While the Adani Group struggles for funds for its Australian mine, the Indian company committed an investment of ₹35,000 crore (approx $5 billion) in various projects in Uttar Pradesh
The Adani Group would fail to meet a March deadline to secure funding for its Carmichael coal mine in Australia, according to news reports.
The $2.3 billion funding was required for the first phase of the $16.5 billion project to take off, as per a report in The Guardian. Bloomberg reported that amid the financial crunch, the company was also considering selling a minority stake in the mine which has been mired in environmental and regulatory concerns since it was first announced almost a decade ago.
The latest development comes almost three months after the Labor government in Australia’s Queensland state was re-elected in a close vote. Vetoing a $900 million government loan to Adani’s mine was a crucial electoral pledge that Queensland’s Labor leader Annastacia Palaszczuk had made to the electorate, reported the Australian. The support for the Adani mine is a political hot potato in Australia and featured prominently in the election campaigning for Queensland in November.
The loan from Australian government’s North Australian Infrastructure Facility (NAIF) was meant to be used for constructing a rail line from the mine to the Abbott Point Coal terminal on the Pacific Ocean coast. While the ruling coalition led by centre-right Liberal Party has thrown its full weight behind Adani's coal mine, opposition leaders from the Australian Labor Party (ALP) are increasingly coming out against the mine, which, once operational, would be the largest of its kind in the Southern Hemisphere.
The latest setback is raising questions whether the project will ever turn into reality. Australia’s four biggest banks- Commonwealth Bank, Westpac, ANZ and the National Australia Bank (NAB)- have already denied funding to Adani in face of environmental concerns, says reports. Situated close to the Great Barrier Reef, a world heritage site, the coal-laden water that the mine would discharge into surrounding waters could cause major damage to the flora and fauna and affect tourism.
Reports that the Adani Group was in talks with Chinese companies to secure funding have been proved to be inaccurate. The Guardian reported that no Chinese bank would fund the project, quoting sources in the Chinese Embassy in Australia.
Adani Group has however expressed its full commitment to the project. A company spokesperson told The Guardian, “We remain 100% committed to the Carmichael project. We are confident of securing financing.”
Incidentally, Adani Group said it would invest about ₹35,000 crore (approx $5 billion) in various projects Investor’s Summit in Uttar Pradesh on February 21.