Adani: We have finance and are ready to start digging
ADANI says finance has been secured to begin construction of its Carmichael mine at no expense to taxpayers.
Adani Mining CEO Lucas Dow made the announcement to community leaders, mining industry contractors and suppliers at the Bowen Basin Mining Club luncheon in Mackay today.
It follows recent changes by Adani to simplify construction and reduce the initial capital requirements for the Carmichael Project.
With the project 100 per cent funded by the Adani Group, Mr Dow said construction and operation of the mine would now begin.
"Our work in recent months has culminated in Adani Group's approval of the revised project plan that de-risks the initial stage of the Carmichael mine and rail project by adopting a narrow gauge rail solution combined with a reduced ramp up volume for the mine," Mr Dow said.
"This means we've minimized our execution risk and initial capital outlay.”
"We will now begin developing a smaller open cut mine comparable to many other Queensland coal mines and will ramp up production over time to 27.5 million tonnes per annum.
"The construction for the shorter narrow gauge rail line will also begin to match the production schedule.
"We have already invested $3.3 billion in Adani's Australian businesses, which is a clear demonstration of our capacity to deliver a financing solution for the revised scope of the mine and rail project.”
The original standard gauge rail solution was costed at around $4.5B but the move to a narrow gauge is understood to have shaved Adani's costs by more than half.
Industry experts have put Adani's new financial outlet at less than $2B.
Mr Dow said the project stacked up both environmentally and financially.
"Today's announcement removes any doubt as to the project stacking up financially,” he said.
"We will now deliver the jobs and business opportunities we have promised for North Queensland and Central Queensland, all without requiring a cent of Australian taxpayer dollars.
"In addition to providing these jobs in regional Queensland, our Carmichael coal will also provide a power source to improve living standards in developing countries."
The Carmichael Project will deliver more than 1,500 direct jobs on the mine and rail projects during the initial ramp-up and construction phase, and will support thousands more indirect jobs, all of which will benefit regional Queensland communities.
"All things being equal we expect those jobs to be split equally between Rocky and Townsville so Rocky will be in the space of 750 direct jobs, plus 6700 indirect jobs,” Mr Dow said.
"Rocky and Townsville are essential locations but clearly we're also seeking leverage from other parts of Central and Northern Queensland to spread the burden of construction and operation.
"But Rocky and Townsville will still be our central hubs.”
Mr Dow said plans for an airport were still on the cards, funded by a sizeable $15.5 million contribution from Rockhampton Council and $18.5m from Townsville.
"Essentially the way we've configured the ramp up we don't require hat airport immediately,” he said.
"As we continue to ramp up towards that 27.5 million tonne in later years, we will require to construct a new airport.
"We would certainly be very keen to open conversations in that regard again.”
Preparatory works at the mine site are imminent and Adani Mining is working with regulators to finalise the remaining required management plans ahead of coal production, some of which have been subject to two years of state and federal government review.
This process is expected to be complete and provided by the Governments in the next few weeks.
Today's announcement follows eight years of planning, securing approvals, and successfully contesting legal challenges from anti-mining activists.
Mr Dow said it had certainly been a "rigorous” process.
"We have worked tirelessly to clear the required hurdles," Mr Dow said.
"Given we meet the same environmental standards and operate under the same regulations as other miners, we expect that Adani Mining will be treated no differently than any other Queensland mining company."
Mr Dow said the people of North Queensland and Central Queensland had been steadfast in their support of the project from the beginning.
"We want to thank them for sticking with us," Mr Dow said.
"Thanks to the people of Rockhampton, Townsville, Mackay, Bowen, the Isaac and Central Highlands regions. We look forward to delivering on our promise of creating jobs and helping local businesses and the communities thrive for many years to come.
"We're ready to start mining and deliver on our promises to Queensland.
"We've been in contact with Mayor Strelow and her team, we've had tremendous support from Rockhampton Regional Council.
"If people are reflecting on the positive news today, in a large part, Townsville and Rocky have contributed enormously to that.”
Cr Strelow said she was delighted by the news.
"The last two years have been a journey of ups and downs for both the Rockhampton Region and for Adani,” she said.
"But today's news that construction at Carmichael will now begin is the news we were all waiting for.
"My ambition is that Rockhampton will be the 'go to' place for the whole Galilee Basin, and this news today is the foundation on which we will build.
"Although a significant proportion of construction workers are guaranteed to come from our own council area, initial workers will also be employed from a wider footprint and this will give a massive boost to the whole region.
"Once construction is completed, after approximately two years, the mine will move into an operational phase.
"For the 'steady state' operational workforce, it is expected that at least half of the permanent FIFO workers on the mine site will live within our council boundaries with the remaining jobs coming from Townsville. Clearly however, the flow- on benefits will still be felt much wider.”
Federal Member for Capricornia, Michelle Landry, welcomed today's announcement, remarking at the prospect of seeing the jobs begin to flow from the project.
"This is tremendous news from Adani today and it marks the end of uncertainty surrounding the project,” she said.
"This project is a big deal for Central Queenslanders because it means thousands more good new jobs in the region and the opening of the first new coal basin in over 50 years.
"I am thrilled to see this project moving ahead and thank Adani for the perseverance they've shown and the commitment they've shown to delivering real jobs for Central Queensland."