Indian mining group Adani has finally made the final investment decision (FID) on its Carmichael coal project in Queensland (Australia), after having reached a royalty deal for the mine with the state government (the group has agreed to pay royalties on coal produced by the project). Adani has also signed letters of award for design, construction, operations, supply of materials and professional services, including a deal with Downer Mining for the construction and operation of the Carmichael mine.
The long-delayed Carmichael coal project was proposed in 2010. Adani initially planned to complete the approval process in two to three years but final approval was only granted in 2016 and a series of legal challenges by environmental groups against the project have delayed it. In late August 2016, the Federal Court dismissed the Australian Conservation Foundation’s claim against the project and found that the approval decision by the government was lawful.
Adani planned to start construction in the third quarter of 2017 and to launch the first phase of the project with a production of 25 Mt/year in 2020-2021. The project is estimated to hold 10 Gt of coal reserves and should eventually produce 60 Mt/year of thermal coal from six open-cut pits and five underground mines.