Adani Group halts work at Australian Mine Project

Adani group has grown exponentially since its formation in 27 years. The group has businesses such as mining, ports & SEZ and power generation & transmission. Adani group was not able to achieve future milestones due to delays in various approvals. The company wants to review their strategy about Carmichael coal mining project in Australia. Therefore Adani group stopped work at the coal mining project. Adani Enterprises share price is down by 3.35 per cent to trading at Rs 93.75 on intraday.

Adani group stopped work at Australian coal mine project on 24th June 2015. The company's coal export from the port near the Great Barrier Reef to India got affected because of not occupying crucial clearances. They ceased engineering work at Carmichael coal mine in Australia's Queensland state. The group is revising its budget and strategy as this project has not taken off from the last five years since its development. They also planned to transport coal through 300 km to Abbot Point near Great Barrier Reef and export to India. They have already spent USD 930 million. The estimated cost of the entire project is USD 7 billion.

The scenario for the project is grim as local landowners have filed a case against the project,  and environmentalists are  protesting against the damage of The Great Barrier Reef. The company has not got funding and big global banks have declined funds owing to the risk in this project.

The Adani Group recently demerged its business to simplify the complex main holding Adani Enterprises. The group's decision to stop the work is on account of  uncertainty on approvals regarding the projects. The thermal coal price plunged in the world market. The Indian government's favoured policy is helping domestic coal production. The Adani group had USD 1.3 billion debt and USD 230 million negative equity for its mining project.

There is a question mark on 10000 jobs and USD 22 billion funds in terms of royalties & taxes to Queensland State. The company has halted this project on temporary basis till they streamline  a strategy for mining project. The production is expected to start in late 2017. Adani group signed up buyers for about 70 per cent of 40 million tonnes coal for eyeing on its first phase.

The competitors of the company like Lanco Infratech and GVK also acquired coal assets in Australia. All of them faced clearance hurdle from landowners and environmental groups. Now only Lanco Infratech coal project is operational.