Australian court quashes indigenous challenge to Adani mine

SYDNEY (Reuters) - An Australian court quashed an indigenous group's bid to block Indian resource conglomerate Adani Enterprises Ltd from developing its controversial Carmichael coalmine on Friday, clearing one of the final legal hurdles to its development.

The company is still securing financing for the A$4 billion ($2.9 billion) first stage of the huge mine, but the company said the verdict allows it to secure land tenure for the site.

The Carmichael mine has faced years of delays amid opposition from environmental groups who argue it will contribute to global warming and damage the Great Barrier Reef, leading some banks to rule out any role in funding.

It was also challenged in Australia's Federal Court by the some members of the Wangan and Jagalingou indigenous groups, who argued the company did not properly negotiate indigenous permission for the mine because their views weren't sought.

None of their grounds of challenge had any merit, Justice John Reeves said in a written judgment he handed down in Brisbane.

The project is located in the remote Galilee Basin, a 247,000 square-kilometre (95,000 square mile) expanse in the central outback that some believe has the potential to become Australia's largest coal-producing region.

Adani said in a statement it will now work with the Wangan and Jagalingou, other indigenous landowners and government authorties "take the next steps in order to finalise land tenure".

A spokesman for the Wangan and Jagalingou flagged an appeal.

"Unless there's some serious counter-advice from our legal team upon reading it in detail, the thing's going to go to an appeal for sure," Anthony Esposito, an adviser to the Wangan and Jagalingou, told Reuters by phone.

Environmental challenges and funding also still remain as stumbling blocks. They were compounded when Australian hauler operator Aurizon Holdings Ltd in February scrapped plans for a rail line that could have served the mine.

Adani had hoped to start shipping coal from Carmichael by March 2020 in the first stage of the project, which it bought amid a coal boom in 2010.

($1 = 1.3782 Australian dollars)

(Reporting by Tom Westbrook; Editing by Adrian Croft)