Adani Group to start coal export from Australian mine this week

Adani Group will begin exporting high quality, low sulphur coal from its Carmichael mine in Australia as early as this week, after battling a seven-year campaign by climate activists and defying a global push away from fossil fuels.

With this, the group taps a new multi-decade source to meet energy needs. “The first shipment of high-quality coal from the Carmichael mine is being assembled at the North Queensland Export Terminal in Bowen ready for export as planned,” Bravus Mining & Resources — Adani Group's Australian mining company — said in a statement.

The exports, a source said, may start as early as within this week.

The conglomerate run by India’s second-richest man Gautam Adani has planned an initial production of 10 million tonnes a year from the mines in the Galilee Basin. The coal has low sulphur content and high calorific value.

“We have already secured the market for the 10 million tonnes per annum of coal that will be produced at the Carmichael mine,” it said. “That coal will be sold at index adjusted pricing, meaning all taxes and royalties will be paid in Australia.” The firm did not share pricing details.

Coal is almost entirely destined for India, where fossil fuel is used to generate nearly 70 per cent of the electricity.

The Carmichael project, proposed in 2010, had provoked a sustained campaign by climate activists in Australia and other places globally, forcing banks and insurers not to work with Adani Group. The ports-to-energy conglomerate self-financed the project and reduced its size to a sixth of its potential (60 million tonnes). BNY Mellon last month said it would stop working with Adani in Australia, the latest institution to do so.

“That sharpening of the plan has kept operating costs to a minimum and ensured the project remains within the first quartile of the global cost curve,” Adani’s Australian CEO Lucas Dow told Reuters.

The Carmichael mine is located in the North Galilee Basin, more than 300 kilometres from the Queensland coastline and approximately 160 km north-west of Clermont in regional Queensland.

The firm had in July this year stated that it has struck coal and exposed the first of coal seams at the Carmichael project in Queensland.

Carmichael coal will contribute to Adani Group’s burgeoning energy portfolio that is designed to create a sustainable energy mix, incorporating, thermal power, solar power, wind power and gas. 

The coal will be exported from a terminal at Abbot Point, which Adani bought for $2 billion in 2011 and renamed North Queensland Export Terminal.

Analysts said it made sense for Adani to dig the mine to help it make back the massive investment on the coal terminal, which has run nearly half empty since Adani acquired it. “It’s about maximising your cash flow returns on the railway line and maximising your profits on Abbot Point,” said Tim Buckley, a director at the Institute of Energy Economics and Financial Analysis.