Engineering, Equipment & Technology, Mining and Heavy Industries

Adani closing on CHPP contracts, but mine stalled

Adani's Carmichael project is a potential $16bn mine and rail venture. Photo: Shutterstock / Adani

Indian conglomerate Adani is lining up an Australian engineer to build and operate the coal handling and preparation plant at its Carmichael mine in central Queensland, but a Supreme Court ruling has set approval of that mine aside, for now.

The Indian multinational is hoping to build a roughly $16bn coal mine and rail operation in the Galilee Basin.

Australian engineering and infrastructure firm Downer says it’s received two Letters of Award from prospective Queensland coal miner Adani, for the construction, operation and maintenance of a Coal Handling and Preparation Plant.

The Letters of Award are both subject to the parties executing binding contracts, with either party able to terminate the Letters of Award if contracts are not executed by September 30.

But should the contracts go ahead, Downer would have approximately $680m of new work on its hands (without taking into account the share of joint venture partners).

Downer and joint venture partner POSCO Engineering and Construction would enter into a $420m engineering, procurement and construction contract to build the CHPP at the Carmichael Mine.

The second Letter of Award relates to the operations and maintenance activities for the CHPP to be performed by Downer. It has an estimated value of $260m, over an initial five year term, and also has two additional one year options.

All that will be for nought, however, if Adani can’t get the mine to go ahead.

And a Federal Court ruling announced on Wednesday morning has “set aside” the mine’s environmental approval, for now, according to multiple reports.

According to the ABC, the ruling is the result of a challenge launched earlier this year by the Mackay Conservation Group. The group reportedly claimed the mine and rail project’s approval by federal environment minister Greg Hunt was invalid on environmental grounds.

“What can happen from here is the minister can re-make his decision, and of course in re-making that decision he can approve the mine again following the proper legal procedures, or he can refuse the mine; that is the legal power open to the minister,” solicitor representing the group, Sue Higginson was quoted by ABC.

“What our client says is that if the minster wants to reconsider approving the mine there is a plethora of new evidence and information about that mine, so it will be no simple task to simply re-approve that mine.

“So really, the Carmichael mine is in a state of legal uncertainty.”

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