Adani coal mine approved amid weaker prices

By Brian Robins
Updated July 29 2014 - 10:08am, first published 12:46am

Indian utility Adani has won environmental approval from the federal government for a $10 billion coal mine even though the sustained downturn in coal prices threatens to undermine the project's viability.

Adani is seeking to develop the Carmichael coal deposit in the Galilee Basin, central Queensland, which will use a specially built rail link to Abbott Point.

It is one of a host of projects planned for the Galilee Basin, although weak coal prices and the need for dedicated infrastructure have rendered their economics marginal at best.

Adani at Carmichael and another Indian group, GVK, which is planning a series of coal projects in the Galilee Basin, have been reported to be seeking partners to help defray the initial development costs and to help provide markets for the output.

Carmichael is planned as a 60-million-tonne-a-year steaming coal mine, which would rank it one of the largest mines globally. It has a development price estimated at well over $10 billion. First coal exports are planned from 2017, with full production not to be hit for several years beyond that. However, it is unclear whether this timing will be achievable.

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