ADANI awards Downer EDI $2 billion coal contract

Australian Mining Jan 5 2015
Downer EDI has won a $2 billion contract for works at Adani’s Carmichael coal mine in Queensland’s Galilee Basin.

Downer said it had received two letters of awards from Adani for the construction of mine infrastructure and mining services at the site.

The contracts are set to run for seven years and are subject to the companies executing binding contracts.

Construction of the mine is set to commence later this year, with first coal slated in 2017.

The Carmichael project holds more than 11 billion tonnes of thermal coal and Adani Mining chief executive Jeyakumar Janakaraj said it will create 10,000 jobs and hand $22 billion to the state government in taxes and royalties.

The mine, which was approved in July, will produce 60 million tonnes a year for 60 years.

 

 

An article in the Courier Mail 17 November stated:
THE Galilee Basin seems likely to now have two rail lines to Abbot Point despite the State Government’s determination to have just one main line servicing the bulk of the coal-rich region.
The Government yesterday announced that it would help fund a 300km rail line to be built by Indian mining giant Adani.

The line will link Adani’s $16.5 billion Carmichael project, potentially the largest coal mine in Australia, to Abbot Point, north of Bowen.

One of the key provisions of the deal was that Adani would have to share the railway with other miners in the Galilee Basin.

India’s GVK and Queensland freight group Aurizon were the initial preferred developer but GVK’s Alpha Coal project has fallen behind the timeline needed by Adani.

Now the two proposed lines will converge near the town of Scottsville before splitting again and heading towards Bowen. Adani’s line will finish north of GVK’s.

The Carmichael mine holds a certified resource of more than 11 billion tonnes of thermal coal, to be exported to India.

Adani Mining chief executive Jeyakumar Janakaraj said a potential $1 billion funding deal with the State Bank of India and other agreements sent a clear signal that the company’s project is on track for first coal in 2017.

He said the project was gathering interest from private and public financiers in India and abroad, and would deliver 10,000 jobs and $22 billion in taxes and royalties to Queensland in addition to helping Adani deliver cost-­efficient power in the Indian market.

The Queensland Resources Council said the Newman Government’s plan to invest in the Galilee Basin rail project was welcome news.

“The Newman Government’s first Infrastructure Enabling Agreement with Adani Mining will help to kickstart its $16.5 billion Carmichael project in the Galilee Basin,” QRC chief executive Michael Roche said.

“It is a combination of hard-headed commercial investment and a visionary approach to securing long-term benefits for the state.

“It is a good day for coal all around with the … news that an Australia-China Free Trade Agreement will include cuts to tariffs currently levied on exports of Australian coking and thermal coal.”

Morgans Stockbroking analyst Roger Leaning said the Government’s infrastructure deal was a significant confidence boost.

“It’s not unprecedented if you look at other support around. There are systems around fast tracking so I don’t see this as huge step away from that,’’ he said.

“It’s a matter of trying to provide support in a time in the cycle when it is quite difficult and it does require people with longer term time horizons and thinking to help do this.’’

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