PLEA Network

4 February 2016, Renew Economy, Adani puts Galilee coal mine on hold pending recovery in coal price. The Indian mining and energy giant Adani Enterprises appears to have put development of its massive and controversial $16 billion Carmichael coal mine in the Galilee Basin on hold – until coal prices show signs of a solid rebound. Which could be never. A report from brooking house Axis Capital in India this week quotes Adani management as saying that no capital expenditure is planned by the company for the project until there is “visibility” of a rebound in the coal price. Given that international coal prices are at record lows, and most analysts predict further falls as the commodity faces increased competition from renewables, and major economies turn away from coal due to environmental and climate impacts, it suggests that Adani accepts that the Galilee Basin may not get developed. This is in complete contrast to the comments attributed by Adani to the Queensland government, where it is apparently trying to sound optimistic about its go-ahead, suggesting it could re-start works within months. The Queensland Labor government this week gave environmental approval for the mine, despite massive concerns about its impact on the Great Barrier Reef and on climate targets. An Adani spokesman was quoted by the Brisbane Courier-Mail as saying: “The company is in a position to resume some of the development and other works on its projects within months of a mining lease being granted.” However, the Axis Capital report (an excerpt of which appears above) quoted Adani management as saying that no capital expenditure is planned for the Galille Basin mine this financial year – and none would be likely in future without “visibility of revival in global coal prices.” Given that the outlook for global coal prices is poor, this suggests that there will be no investment in Galilee, and underscores the difficulty it will have in attracting finance for a project that analysts says will not be economic. Even the conservative International Energy Agency said late last year that it did not expect carmichael and other projects in the Galilee Basin to be built. “It is not likely that the above listed projects will be operational by 2020, if ever,” it said in its latest medium term coal outlook.Read More here