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Adani seeks $1.54 bn from Chinese firm for funding Australia coal project

Adani hopes to start shipping coal from Carmichael under the first stage of the project by March 2020

Reuters  |  Sydney 

People protesting against Adani's Carmichael coal mine project, at Bondi Beach in Australia. 	Photo: Reuters
People protesting against Adani’s Carmichael coal mine project, at Bondi Beach in Australia. Photo: Reuters

Indian conglomerate Enterprises is in talks with Machinery Engineering Corp (CMEC) for the financing of a controversial mine project in Australia, two sources with knowledge of the situation said on Thursday.

is seeking A$2 billion ($1.54 billion) in outside financing for its proposed A$4 billion mine in the state of Queensland. However, Australian and overseas banks have baulked at granting loans for the project which environmentalists oppose because of concerns over the size of the mine and the potential for damage to the Great Barrier Reef.

is an engineering contractor that is majority-owned by Chinese state-owned enterprise (SOE) National Machinery Industry Corp Ltd, or Sinomach.

would provide financing through the Export-Import Bank or Construction Bank, or both, in return for winning the procurement and engineering contracts, for the project, according to a report issued earlier on Thursday by the Institute for Energy Economics and Financial Analysis, (IEEFA) an outspoken opponent of the project, citing unidentified sources.

"Chinese SOE backing raises the probability that can secure a financial close for this long-delayed project," the report said.

In addition to the A$2 billion in financing, has also applied for A$900 million in Australian government loans to build a railway to ship 400 km (250 miles) from the site to a port on the Pacific Ocean for export.

has been delayed by court challenges from environmentalists and indigenous groups concerned about climate change, and the impact on native land and water supply, but those challenges have been rejected.

Jeyakumar Janakaraj, chief executive of Australia, told Reuters on Oct. 3, it wants to tie up financing by March 2018 and would look to sell a minority stake in the project to help raise funds.

hopes to start shipping from under the first stage of the project by March 2020.

($1 = 1.2974 Australian dollars)


First Published: Fri, November 03 2017. 08:51 IST