Adani Carmichael mine 'just' viable, other Galilee ventures less so

 theage.com.au  06/14/2019 08:01:00 

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"We think a fair bit of infrastructure is needed for a second player to come in there, which is going to discourage people," Mr Simington said.

Tim Buckley, an analyst with the Institute for Energy Economics and Financial Analysis (IEEFA), said the Carmichael mine has advantages over other prospective Galilee mines because Adani owns the Abbot Point port which will export the coal, and power plants in its home nation of India that will burn it.

Mr Buckley noted Adani's huge Mundra plant had recently been granted a 30 per cent tariff increase for its power, while its new Godda plant in north-east Jarkhand state - set up to supply neighbouring Bangladesh - enjoys tax relief and other incentives in a special economic zone.

"If you give enough subsidies to anything, it becomes viable," Mr Buckley said, noting the Carmichael mine itself has unlimited access to groundwater and other fuel and royalty inducements in Australia.

Adani's proposed Carmichael coal mine is one of at least seven such mines that could be developed in the Galilee Basin.

Adani's proposed Carmichael coal mine is one of at least seven such mines that could be developed in the Galilee Basin.Credit:

The mines lining up behind Adani in the Galilee Basin include the Alpha Coal and Kevin's Corner projects owned by GVK and Gina Rineharts's Hancock; Clive Palmer's Waratah Coal projects at Alpha North and Galilee Coal; AMCI's South Galilee; and MacMines Austasia's China Stone Coal Projects.

Even the first stage of the Carmichael mine, with its projected 10-15 million tonnes a year output, faces challenges.

One is that it first needs to build a 200-kilometre rail link to join Aurizon's Newlands rail corridor, and then negotiate to secure access.

"The annual tonnages that travel over that corridor are around 30 million tonnes, however the balance of capacity [about 20 million tonnes] is all currently contracted to existing customers," an Aurizon spokesman said.

Lucas Dow, Adani's Australian head, said on Thursday that the mine was "economically viable as an open-cut operation, and that "it will endure through the price volatility that typically our industry receives".

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