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Created before Nov 2016
Last update: 2019-07-02 10:24:34 BankTrack
Julien Vincent, Market Forces
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|Sectors||Coal Electric Power Generation, Coal Mining, Oil and Gas Extraction|
listed on Bombay Stock Exchange & NSE
The Adani Group is controlled by the Adani family. They operate a number of private businesses and hold a controlling share in Adani Enterprises. The group's structure can be viewed here.
Adani is an Indian multinational conglomerate, founded by Indian billionaire Gautam Adani in 1988. Its business units consist of Resources (coal mining and trading), Logistics (ports, railways and ships) and Energy (power generation and transmission). It has coal mining interests in India, Indonesia, Australia and Bhutan and operates a series of massive coal power plants in India with a total installed capacity of 10,440 MW. Adani's yearly production of coal amounts to seven million tonnes. The company says it aims to reach a production of 200 million tonnes via its mining and trading operations by 2020.
Why this profile?
Adani has a questionnable track record of fraud and corruption allegations and human rights abuses. Its coal mines and coal power plants are responsible for severe adverse impacts on the environment and climate change.
Human rights and social issues
Incident at Gujarat power station Adani coal companies have claimed serious injuries and deaths in India. In 2016, 21 workers suffered horrendous burns at Adani’s coal-fired power station in Gujarat when a hot water pipe burst, seven of whom later died from their injuries.
Exploiting workforce An investigation by Fairfax Media found evidence that Adani were exploiting their Indian workforce by underpaying them, overworking them, and exposing them to lax health and safety standards. Many labourers working on a luxury housing project in Gujarat were reportedly forced to live in makeshift houses with dirt floors, and no running water or toilets. The poor sanitary conditions led to regular outbreaks of cholera from contaminated drinking water.
Impacts on tourism and local people In 2016 an Indian court found Adani Enterprises Ltd and other entities liable for failing to clean up after the unseaworthy coal ship they chartered sank off the coast of Mumbai in 2011 resulting in a massive oil spill which destroyed mangroves, polluted beaches and saw the spilling of coal into the sea. Adani Enterprises Ltd was fined the equivalent of AUD 975 000. The Judicial members recognised that both the sinking itself and the fact that it had not been cleaned up for over five years were causes of serious damage, including damage to the tourism industry and local people.
Impacts on fishery In January 2016 the Indian National Green Tribunal cancelled the environmental approval of Adani Hazira Port that it held for the development of port activities in the Hajira district, Surat. Justice Kingaonkar found Adani Hazira Port liable for illegally undertaking work without an environmental approval at Hajira, Surat. This blocked the access of 80 fishing families from the traditional village of Hajira to their traditional fishing zones. Adani Hazira Port Private Ltd was ordered to pay 25 crore (approx. AUD 4.8 million) for compensation and restoration.
Adani's annual coal production of seven million tonnes is responsible for emitting an estimated 10.01 million tonnes of CO2 into the earth's atmosphere, contributing heavily to the adverse impacts of climate change.
Coal mines in India 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. This would be responsible for flooding flood over 5,600 hectare of land, fully submerging six villages and affecting over thirty 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.
Violations of environmental regulations at Adani's Munda Port In December 2010 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 (Environmental Justice Australia).
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 2013 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 (Environmental Justice Australia).
Illegal construction In 2012 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.
Illegal iron ore transportation and bribery An 2011 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 detailed 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".
In 2015 an investigation into Adani by the Sydney Morning Herald uncovered evidence of a very murky money trail leading to tax havens in the Cayman Islands, criminal investigations, and secret ownership.
Adani Mining’s Carmichael coal mine project receives final approval
Adani Mining’s plan to build a 10 million tonnes open-pit thermal coal mine and associated infrastructure in the Galilee Basin of Queensland, Australia, has sealed the final approvals it requires to start construction. Lucas Dow, CEO Adani Mining, confirmed that the company had received advice from the Queensland Government’s Department of Environment and Science (DES) that the Groundwater Dependent Ecosystems Management Plan (GDEMP) had been finalised and approved.
State and federal investigation launched into Adani's Carmichael water drilling
The Australian government will investigate allegations Adani has drilled illegal groundwater bores at its Carmichael mine site. Environment group Coast and Country has said it obtained aerial footage showing dewatering bores that were sunk without approval.
Adani to begin construction of Carmichael coal mine in October
Indian mining giant Adani has announced it will break ground on its Carmichael coal mine in Queensland in October. Company chairman Gautam Adani issued a statement overnight, confirming the start of works for the $16.5 billion project in Queensland’s Galilee basin, with the first coal to be produced by the facility in March 2020 (News.com.au).
Adani gives 'green light' to $16bn Carmichael coal mine
Indian billionaire Gautam Adani has given the “green light” to the Carmichael mine and rail project, but it will still hinge on its Australian arm, Adani Mining, gaining bank backing for the contentious venture. Adani’s top executive in Australia, Jeyakumar Janakaraj, took a dig at “activists who sit in creature comfort and criticise us” while trumpeting the decision to invest in Australia’s largest proposed coalmine. The company is yet to secure its bid for a $900m infrastructure loan from the federal government for a railway that would help other miners open up Queensland’s Galilee Basin (The Guardian).
Environmental Justice Australia' s report shows Adani's disastrous track record
A detailed legal research brief by Environmental Justice Australia, reveals Indian based Adani Group’s track record overseas, including illegal dealings, bribery, environmental and social devastation and allegations of corruption, fraud and money laundering. The Adani Brief puts Australian governments and potential financiers on notice that backing the Carmichael mine and rail project in Queensland’s Galilee Basin may expose them to financial and reputational risks. The full brief can be read here.
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.
Between 2014 and 2017 42 financial institutions financed a total of USD 4.8 billion in loans and provided underwriting services totalling USD 2.3 billion to Adani. These are specified below.
Between 2016 and 2018 28 financial institutions financed a total of USD 2.1 billion in loans and provided underwriting services totalling USD 1.05 billion to Adani. These are specified below.
In August 2015 it was reported that Commonwealth Bank's role as adviser to Adani's proposed Carmichael coal mine had ended, with sources citing the environmental controversy surrounding Carmichael and the project's financial risk in the face of tumbling coal prices.
In May 2019 it was reported that French investment bank Rothschild & Co. was "no longer advising Adani in relation to the sale of an ownership stake in the Abbot Point coal export port".