Approval delays behind halt in work on Australia coal project: Adani

Two contractors were last week told to stop work on the Carmichael mine

Adani Mining said the latest suspension of work on its A$10 billion ($7.4 billion) Carmichael coal mine in Australia was due to delays in government approvals for the project, which environmentalists say could damage the Great Barrier Reef.

Output from the mine, one of a handful under development in the Galilee Basin of Queensland state, will be mostly exported to India, where it will be central to plans by Indian Prime Minister Narendra Modi to bring electricity to hundreds of millions of people living off the grid.

Environmentalists are campaigning to have the mines stopped, saying they will put parts of the Great Barrier Reef under threat and help accelerate global warming. Supporters say that at 247,000 square kilometres, the Galilee Basin has the potential to become Australia's largest coal-producing region, providing thousands of jobs.

Parsons Brinckerhoff and Korea's Posco Engineering & Construction, which is also touted as an investor in the final project, were told late last week to stop work on the Carmichael mine.

"The preliminary works contracts were previously sustained due to the level of investment Adani had maintained for more than 12 months in anticipation of a range of government decisions and approvals timeframes," Adani said in a statement emailed to Reuters.

Posco E&C said Adani had asked it to halt its design work as of July 16, with tentative plans to resume work in early October.

Greenpeace on Wednesday called on the federal environment Minister Greg Hunt to revoke the project's mining licence.

"The burning of coal from Carmichael would produce 121 million tonnes of deadly carbon dioxide emissions every year at maximum production," said Nikola Casule, a Greenpeace climate and energy campaigner, "It would be a catastrophe for the climate and for the Great Barrier Reef." Hunt's office in Canberra did not immediately respond to a request for comment.

Adani has signed up buyers for about 70 per cent of the 40 million tonnes Carmichael is due to produce in its first phase.

The project mainly hinges on environmental approval to deepen a port on the fringe of the Great Barrier Reef in order to ship the coal. An earlier plan to dump 3 million cubic metres of soil dredged at the port of Abbot Point into the sea about 25 km from the reef was rejected.

The Australian federal government must approve the actual channel dredging, and Queensland state needs to clear Adani's solution for storing the spoil.