BACK ON TRACK: Adani has found a solution to its rail line conundrum in using the existing Aurizon network.
BACK ON TRACK: Adani has found a solution to its rail line conundrum in using the existing Aurizon network. Contributed

BREAKING: Adani announces rail solution to help deliver mine

ADANI Mining has today announced a new narrow gauge railway design solution using the existing Aurizon rail network to accelerate delivery of its Carmichael mine in the Galilee Basin.

The miner suffered a major setback last November when the Queensland Government blocked it from obtaining a Northern Australia Infrastructure Facility loan fund to fund construction of a rail line from the Galilee Basin to the Abbot Point Port.

After months of uncertainty, Adani today said it has found a solution to its rail line conundrum, paving the way for the mega mine to be built.

The company had previously planned to build a $2.3 billion, 388km standard gauge railway between the Galilee Basin and Abbot Point Port but will instead leverage existing rail infrastructure.

The revised design almost cuts the length in half following the same route as the previously contemplated design, however, instead of going all the way to the Port, it connects into the Aurizon network.

Adani's mine and rail projects.
Adani's mine and rail projects.

Speaking today at the Rockhampton Mayor's Business Forum, CEO of Adani Mining, Lucas Dow, said the narrow gauge rail line would be approximately 200km long and will connect the mine to Abbot Point Port using the existing Aurizon rail network.

He estimated the change would halve the cost to deliver the rail line, bringing it in at just over $1 billion.

"By connecting to the existing network we can fast-track project delivery, reduce capital expenditure and deliver coal more quickly to countries in Asia with growing energy demand,” Mr Dow said.

"We're 100 per cent committed to getting the Carmichael Project off the ground.

"Delivering practical, time efficient and cost-effective solutions such as this new rail design will ensure project benefits are realised as quickly as possible, especially in regional Queensland where people are eager to secure jobs and opportunities for small business.”

Adani CEO Lucas Dow will speak at the Resource Industry Networks monthly briefing at Ocean international.
Adani CEO Lucas Dow will speak at the Resource Industry Networks monthly briefing at Ocean international. Contributed

He said Adani had been working through financing and today's decision was an important step towards concluding the rail finance after which point they would roll into mine financing and commence the operation of the mine.

Mr Dow said construction and operation of the railway would create thousands of new jobs and open the Galilee Basin for development.

This will benefit places like Rockhampton, Townsville, Bowen and Mackay and flow on to the rest of the state.

The narrow gauge rail will follow the same route as previously contemplated and the initial design capacity of 40 million tonnes per annum, ensuring capability to manage the Carmichael mine's 27.5 million tonne yearly production rate.

The 27.5 million tonne open cut mine is significantly smaller than the 60 million tonne mine allowed under the Carmichael Project approvals, which enables the delivery of a lower capacity rail design.

Temporary Rail Camp Construction - Adani and contractor personnel overseeing the earthworks of the Temporary Camp hardstand including sediment basin excavation
Temporary Rail Camp Construction - Adani and contractor personnel overseeing the earthworks of the Temporary Camp hardstand including sediment basin excavation Contributed

Mr Dow said Adani had already secured the necessary approvals and land access agreements with landholders needed to build the line.

"All our existing agreements with landholders will remain in place without question,” he said.

"These people have been with us every step of the way and we're determined to ensure we maintain these relationships”

Adani will now submit the necessary applications to connect the new rail line with the existing network.

"As we progress this, we'll be making an application with Aurizon in order to further the solution of the narrow gauge operation,” he said.

"The terrific aspect of this narrow gauge solution is that it's a regulated asset and so in effect the process for us to connect to the existing system is a regulatory system.

"Accordingly, we've reduced the uncertainty to be able to bring this mine to fruition in a much more quicker and cost effective manner.”

Adani is evaluating its options for provision and management of rolling stock to service the mine.

Adani map.
Adani map. Rockhampton Regional Council

The question of obtaining finance still lingers over the project.

In July, Karan Adani, the son of the company owner Gautum Adani and chief executive of the ports business, told Indian TV the $6 billion project's final financial hurdle is the $1.35 billion in funding needed for the rail line, and that appears to be close.

"We have all the Government approvals for everything,” he said.

"We have closed the financing of the mine, the port is already operational and now we are just closing the financing of the rail.

"I think that project is about $US1 billion ($A1.35 billion).”

It follows a victory for the company in August where the Federal Court ruled for Adani over a native title group that had been seeking to block its coal mine in the Galilee Basin.

Adani announced in July it had refinanced the debt owing on its Abbot Point coal port with a South Korean company.

Controversy continues to surround the Carmichael mine project's use of ground water but Adani maintains it is continuing its ongoing dialogue with regulators about its operations and regularly submits information as required under its various approvals.



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