BANKS DODGY DEALS CAMPAIGNS
About BankTrack
20 years of BankTrack – Our history
Visit us
Organisation
Our team
Our board
Guiding principles
Team up with us
Jobs at BankTrack
Our annual reports
Funding and finances
BankTrack in the media
Our privacy policy
Donate
2023-09-18 00:00:00
New report and blog: Barclays' bond with Adani
2023-08-23 00:00:00
Decarbonization: steel not making the cut
2023-07-27 00:00:00
Two months ago 62 organizations and 3 Goldman Environmental Prize winners wrote an Open Letter to the TNFD: No one responded
2023-07-13 00:00:00
The Sustainable Steel Principles: One step forward when leaps are needed
2023-09-15 17:34:10
The number of major banks refusing to support EACOP reaches 24
2023-07-31 14:30:01
Equator Principles recognise projects’ risk to climate for the first time
2023-05-17 14:30:30
EACOP Financial Advisor SMBC is no longer involved with the project
2023-03-28 13:43:00
French bank Société Générale withdraws from Rio Grande LNG
Connect
2023-09-18 00:00:00
Barclays' bond with Adani
2023-06-26 00:00:00
How should financiers align with the Global Biodiversity Framework? Five Key Principles
2023-04-13 00:00:00
Banking on Climate Chaos 2023
2023-04-12 00:00:00
The East African Crude Oil Pipeline (EACOP): Finance Risk Update No. 4
See all publications
Sections
Banks Dodgy Deals Campaigns
Our campaigns
Banks and Climate
Banks and Human Rights
Banks and Nature
Banks and Pandemics
Our projects
Tracking the NZBA
End Coal Finance
Banks and Putin's war in Ukraine
Banks and steel
Tracking the Equator Principles
Tracking the PRBs
Find a Better Bank
Banks and the OECD Guidelines
Media
News Publications
Fossil Banks No Thanks StopEACOP Forests & Finance Banks & Biodiversity Drop JBS Bank of Coal Don't Buy into Occupation
BankTrack
About BankTrack 20 years of BankTrack – Our history Visit us Organisation Our team Our board Guiding principles Team up with us Jobs at BankTrack Our annual reports Funding and finances BankTrack in the media Our privacy policy Donate
Successes Contact BankTrack
Donate Mailing list Facebook Twitter Login
Home › Partner news ›
Partner News

Adani’s US$7bn Australian coal project unviable

2013-11-26 | Sydney
By: Greenpeace
Contact:

INTERVIEWS:
Report authors Tom Sanzillo and Tim Buckley (IEEFA), and Greenpeace's Erland Howden, are available for interview.
MEDIA CONTACTS:
Julie Macken: +61 400 925 217

2013-11-26 | Sydney
By: Greenpeace
Contact:

INTERVIEWS:
Report authors Tom Sanzillo and Tim Buckley (IEEFA), and Greenpeace's Erland Howden, are available for interview.
MEDIA CONTACTS:
Julie Macken: +61 400 925 217

A new report released today by US-based Institute for Energy Economics and Financial Analysis (IEEFA) - Remote Prospects: A financial analysis of Adani's coal gamble in Australia's Galilee Basin - warns investors the controversial 60 million tonne per annum Carmichael coal mine and infrastructure project is uncommercial.

Report co-author, IEEFA's Tom Sanzillo, former first deputy comptroller of New York said, "Our conclusion is that Carmichael presents a picture of unacceptable risk. It's a high cost coal product in a low cost market in structural decline. The project is uneconomic by any measure," said Mr Sanzillo.

"This project is on the wrong side of the coal boom. It might have been viable 5 years ago but the market has moved on. Adani bought in at the peak of the coal cycle but failed to predict the structural decline of coal," Mr Sanzillo said.

"Adani is now overextended with unrealistically ambitious expansion plans, has no successful history of coal mining, has lost share value in critical segments, and is over-leveraged, with $US12bn of debt against external market capitalization of $US5.17bn. It is in not in a strong position to complete this project."

Adani Enterprises is proposing to develop the 60 million tonne per annum thermal coal mine complex in the remote Galilee Coal Basin, central Queensland, Australia; construct 500km of rail infrastructure across agricultural land and floodplains to the coast; and develop a highly contentious coal export terminal through the iconic, UNESCO World Heritage listed Great Barrier Reef.

Key findings of the report include:

  • The estimated cost of production of A$87/t (energy adjusted) is likely to be above the global thermal coal price for the foreseeable future, rendering the project uneconomic.
  • Adani is in a weak financial position to execute such an ambitious project: with external equity market capitalization at only US$5.17bn against estimated net debt of $12bn, development costs for the Carmichael and Abbot Point T0 coal terminal projects are estimated at US$10bn.
  • Adani has over-estimated coal quality while under-estimating costs and project complexities.
  • At peak production of 60 million tonnes per annum, Adani's Carmichael mine would be by far the largest coal mine in Australia in a remote inland region with no power, rail, water or workforce infrastructure. Prior to 2013, Adani's only other experience in coal mining is a 2-4mtpa coal mine in Indonesia that has consistently performed below expectations.
  • The project is plagued by delays that continue to squeeze the Adani Group's cash flow, with the company conceding the 2014 timetable for commencement of production has been pushed out to 2016, but more likely 2017 with full production beyond 2022.

 

Report co-author Tim Buckley, independent financial analyst said, "Our analysis shows a systemic problem with the financial viability of coal mining in the Galilee Basin. Adani may have thought they were buying a coal mine, but it is increasingly likely that they have inadvertently bought themselves the world's most expensive cattle station."

"The Queensland government's recent announcement of a royalty holiday for the first movers in the exploitation of Galilee coal signals to the market that these high-cost greenfield projects in Queensland are unviable from an investment perspective."

Erland Howden, Energy Campaigner Greenpeace Australia Pacific, which commissioned the report, said, "It is clear that the Carmichael project, if developed, will be an environmental and climate disaster. This report shows that the project is also uneconomic."

Dodgy Deals
There are no active project profiles for this item now.

Carmichael coal mine project

Australia
Project
On record
Coal Mining

Carmichael coal mine project

Australia
stdClass Object
(
    [id] => 8069
    [item_id] => 352
    [item_table] => ci_companyprofiles
    [position] => 0
    [link_id] => 931006
    [_table] => ci_images
    [_type] => cover
    [_data] => 
    [_visible] => 1
    [tag] => 
    [title] => 
    [file] => 180917_adani_mundra_port_kutch_gujarat.jpg
    [description] => Adani's Mundra port in Gujarat, India
    [ownership] => Emperor Genius via Wikimedia Commons (CC BY SA 3.0)
    [filetype] => 
    [hidden] => 0
    [croporig] => 0
    [cropdata] => 
    [tags] => 
    [rights] => 0
    [updated_at] => 2021-08-23 10:54:23
    [created_at] => 2018-09-17 14:29:17
    [dimension] => 500x334
    [mime] => image/jpeg
    [16:9] => 0
    [210:297] => 0
    [border] => 1
)

Adani Group

India
Company
active
Coal Mining | ...

Adani Group

India
There are no active company profiles for this item now.
Sections
Banks Policies Dodgy Deals Campaigns
Our campaigns
Banks and Climate Banks and Human Rights Banks and Nature Banks and Pandemics
Our projects
Tracking the NZBA End Coal Finance Banks and Putin's war in Ukraine Banks and steel Tracking the Equator Principles Tracking the PRBs Find a Better Bank Banks and the OECD Guidelines
Media
News Publications
Fossil Banks No Thanks StopEACOP Forests & Finance Banks & Biodiversity Drop JBS Bank of Coal Don't Buy into Occupation
BankTrack
About BankTrack 20 years of BankTrack – Our history Visit us Organisation Our team Our board Guiding principles Team up with us Jobs at BankTrack Our annual reports Funding and finances BankTrack in the media Our privacy policy Donate
Successes Contact BankTrack
Vismarkt 15
6511 VJ Nijmegen
The Netherlands
Contact@banktrack.org
Donate Mailing list Facebook Twitter
©2023 BankTrack
BankTrack is a registered charity in the Netherlands (ANBI) - RSIN 813874658
Find our privacy policy here

Stay up to date

Sign up now for all BankTrack's news


Make a comment

Your comment will be reviewed, before being posted