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Created before Nov 2016
Last update: 2016-07-04 21:26:55 BankTrack
Julien Vincent, Market Forces
Shani Tager, Greenpeace Australia
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Adani is a large Indian resources, logistics and energy company with big expansion plans. It was founded by Indian billionaire Gautam Adani, in 1988. It has coal mining interests in India, Indonesia and Australia and it runs a series of massive coal power stations in India. Over 2014-2015 the company earned revenues of USD17.5 billion, while employing 10,400 people.
Adani produced four million metric tons of coal in 2012. It is implementing coal mining projects with total annual coal production capacity of around 110 million tonnes per year. Adani Group has a mission to achieve mining capacity of 200 million tonnes of coal by year 2020, making Adani one of the largest mining groups in the world.
Gautam Adani |
The Adani Group is controlled by the Adani family. They operate a number of private businesses and hold a controlling share (76%) in Adani Enterprises, which is listed on both the Bombay Stock Exchange Limited(BSE) and the National Stock Exchange Limited (NSE). Foreign institutional investors hold almost 19% and the indian public only 1.5%.
Adani gas Ltd. – India
Adani ports & SEZ Ltd. – India
Adani power – India
Power Construction Corporation of China (POWERCHINA) – China
Adani Power has been subject to a hearing in 2011 with the public interest ligitator alleging that hot water generated by the Adani Power owned power plant leaked, causing an adverse impact to the environment. It was also alleged that it mixes in with groundwater, causing salinity levels to go up making fertile land unsuitable for agriculture. This impacts fishermen and farmers in the area. (source: Environmental Justice Australia).
The "Terminal 0" at Abbot Point proposed by Adani, would be constructed metres from a turtle nesting and hatching ground.
The Parsa and Kente Basan coal mine blocks in India are in the densely forest Hasdeo-Arand coalfield in Chattisgarh. In March 2012, the Ministry of Environment gave final forest clearance (Stage II) to the Parsa East and Kante Basan blocks, after significant pressure from the Prime Minister's Office. This clearance is being challenged before the National Green Tribunal on the grounds that the conditions specified in Stage I clearance have not been met.
Plans for environmental destruction Adani lobbied hard for years to attain permission to build an open cut coal mine in Maharashtra. The project was rejected in 2009 as it was within the buffer zone of the Tadoba - Andhari Tiger Reserve (TATR) and the area was part of the tiger corridor. The most recent incarnation of the plan would have required the destruction of 1,400 hectares of forest. In 2012 a special committee of Maharashtra forest officials rejected clearance to Adani Power Ltd for the project.
Adani Power also has plans to construct a 1,320 megawatt coal power plant in Madhya Pradesh. The plant will necessitate construction of a dam to supply its water. Construction of this has will flood over 5,600 hectare of land, fully submerging six villages and affecting over 30 in total.
History of breaching environmental regulations in India Research by Environmental Justice Australia into Adani Group's track record in regards to the adherence to environmental regulations has revealed a consistent pattern of breaching Indian environmental regulations by the Group and its subsidiaries.
December 2010: violations of environmental regulations, coastal zone regulation and of the coastal zone management plan Officials of the Ministry for Environment and Forests launched an investigation into the Mundra Port and Special Economic Zone which is operated by Adani Ports and Adani Mundra. The Ministry found large-scale destruction of mangrove forests and obstruction of creek systems and natural seawater flows leading the Ministry to issue a "show cause" due to violations of environmental regulations and the conditions of its environmental approval (source: Environmental Justice Australia).
April 2013: continued coastal mismanagement In 2013 an independent committee observed even more environmental damage done to the coastal area. This demonstrated once more disregard for government regulations; protective measures for a nearby conservation area were ignored, local creeks had vanished and more than 75 hectares of mangrove forest were destroyed due to a failure to protect this area. Additionally, an airstrip was constructed without environmental approval. The committee recommended the establishment of an environment restauration fund of AUD40 million. In September another "show cause" notice was issued by the Ministry to Adani Mundra and required the establishment of an environmental restauration fund as well as a plan to protect the livelihoods of affected fishermen (source: Environmental Justice Australia).
2011-2012: Illegal construction Gujarat courts have found that Adani had illegally constructed an intake channel for its power station at Mundra on private and government land. The company was ordered to compensate the individual on whose land the illegal construction had occurred.
2011: Illegal iron ore transportation and bribery An investigation by the Karnataka anti-corruption ombudsman (Lokayukta) uncovered a major scandal. He found that Adani Enterprises and other port operators were actively involved in large scale illegal exports of the iron ore resulting in "huge" economic losses to the Government. The investigation's report details how, at its port in the south western state of Karnataka the company routinely received trucks overloaded with iron ore. In doing so the company was involved in the theft of substantial quantities of iron ore. It also received illicit iron ore at its plot at Belekeri port from a number of suppliers that had no permits to supply ore to that port.
Bribes Documents seized from Adani's offices indicated that the company had been paying cash bribes to officials of the Port department, Customs, Police, State Pollution Control Board, Weights and Measurement Department, Local politicians and others. The bribes were paid to receive "undue favour for illegal exports".
Uneconomic The Carmichael project is uneconomic – a high cost coal product in a low priced coal market with an uncertain future. The Adani Group is a weak partner for this expensive coal, rail and mine project in Australia. In the last several years the enterprise has announced an overly ambitious expansion plan, lost share value in critical segments and is overleveraged. The Adani Group faces a series of logistical and operational hurdles that have caused delay and threaten to push the current estimated price of US$7bn upward.
Indian agencies investigate Adani
Adani Enterprises, the ultimate parent company of the proposed Carmichael mine in Australia, is one of the coal companies under investigation by India’s Directorate of Revenue Intelligence (DRI) for inflating the cost of imported coal. For a decade the DRI has been investigating Adani entities which traded in diamonds and gold jewellery. Adani Enterprises was named in a 2011 report by Karnataka’s state ombudsman in which documents seized by police allegedly “indicate that money has been regularly paid to port authorities, customs authorities, police department, mines and geology and even to MLAs/MPs.” Adani has rejected the allegations. (ABC News, Scroll)
Green panel defers nod to Adani Power 1,600 megawatt project in Jharkhand
An environment ministry panel has deferred green clearance to Adani Power 's 1,600 megawatt thermal project in Jharkhand, India and has sought more information from the company. Adani Power (Jharkhand) Ltd, a subsidiary of Adani Power Ltd, is planning to set up 2x800 megawatt Paraspani thermal power project in Godda district of Jharkhand (source: www.moneycontrol.com).
Adani freezes investment in Carmichael mine until world coal price recovers
According to The Guardian: Adani has frozen its investment in Australia's largest proposed coalmine until world coal prices show a clear recovery, its executives have indicated in stock analyst briefings in India. The briefings even gave rise to speculation that Adani Enterprises, which has previously flagged spending USD4.1 billion on the Carmichael mine in north Queensland, might abandon its plans for the mine altogether amid a huge move by the company into solar energy.
Adani and Commonwealth Bank part ways, casting further doubt on Carmichael coal project
According to The Sydney Morning Herald: The Commonwealth Bank's role as adviser to Australia's biggest coal project, Adani Mining's proposed Carmichael Mine in Queensland, has ended, dealing a heavy blow to its prospects and a significant victory for environmental groups.
In August 2015 it was reported that Commonowealth Bank's role as adviser to Adani had ended, with sources citing the environmental controversy surrounding Carmichael and the project's financial risk in the face of tumbling coal prices