Who is Adani?

The Adani Group is close to securing finance for its controversial coal mine and railway project in outback Queensland, with an announcement expected in coming weeks that Chinese state-owned enterprises, banks, and export credit agencies are backing the venture.

Australian taxpayers may be let off the hook under the deal, which could mean Adani no longer requires an Australian Government-subsidised loan of up to $1 billion for the railway it needs to transport the coal to port.

But China’s money will come at the cost of local jobs.

Chinese enterprises and export credit agencies invariably require that materials for key infrastructure are sourced from China, effectively shifting work out of Australia and undermining Adani’s claims its project will create many thousands of additional jobs for Queensland.

Galilee’s devastating impact

Jobs and exports from existing coal regions will be decimated by new project, according to new research.

Just days ago, a director of Adani Mining, an Australian subsidiary of the Adani Group’s flagship company Adani Enterprises, told industry figures Adani had secured Chinese funding for the Carmichael mine in North Queensland and the Carmichael rail project.

He said Adani would not need the loan from the Northern Australian Infrastructure Facility (NAIF) to fund the 388-kilometre railway, and claimed a formal announcement of “financial close” was imminent, the ABC has been told.

Details are sketchy, however the ABC revealed earlier this month that a Chinese state-owned enterprise, China Machinery Engineering Corporation (CMEC), was in negotiations with Adani for contracts to build key mining plant and equipment in return for China’s financial backing of the Carmichael mine.

CMEC is listed on the Hong Kong stock exchange, but is 78 per cent owned by the giant Chinese state-owned enterprise China National Machinery Industry Corporation Ltd, or Sinomach.

Adani Mining’s chief executive Jeyakumar Janakaraj told Reuters in October that Adani was in talks to secure loans from export credit agencies for its mining equipment and tie up other funding.

“The company is in advanced discussions in all these cases with merely term sheets under final negotiations,” he said.

Mr Janakaraj said Adani was looking to sell minority equity stakes in the coal project, and rail line, to financial institutions and contractors to help fund it.

“By the end of this financial year, all things will be in place,” he said.
The Indian financial year ends on March 31.

Yet again, we are paying no heed to farmers and stepping over them for a big foreign coal company.

If China does back the Adani mine, it could seriously undermine another Chinese investment — the 50 per cent stake in the Port of Newcastle held by China Merchants Group, a large, Chinese state-owned corporation.

Coal exports from the Galilee Basin would decimate jobs and output in existing Australian coal regions, including in the Hunter Valley, and push down the benchmark coal price by $US25 million a tonne, according to a recent report by Wood Mackenzie, a leading global resources analysis firm.

Support for a massive new coal mine — with a licensed capacity of 60 million tonnes a year — would also run counter to the China’s rhetoric on climate change.

At the recent international climate change talks in Bonn, China has been keen to present itself as a global leader on efforts to limit carbon dioxide emissions to keep global temperature rises to less than 2 degrees above pre-industrial levels.

Climate change activists are lobbying Chinese officials in an effort to stall any Chinese funding for Adani’s Australian venture which would open an entire new coal region — the Galilee Basin — for mining.

In North Queensland, “Stop Adani” activists opposed to the coal mine have recently tried to occupy Adani’s Townville office and to stop construction work on the railway project.