India's Adani Enterprises will fully fund its coal mine and rail project in Australia itself, the company said on Thursday, taking a big step closer to building the long-touted project that has faced fierce resistance from green groups.
Adani Mining Chief Executive Lucas Dow announced the funding milestone for the Carmichael mine in a speech in Queensland, a state that has been counting on the project to create jobs.
He did not comment on the actual cost. Last year, the company said it was looking to borrow under A$2 billion ($1.46 billion) to get the A$4 billion project off the ground, targeting its first exports in March 2020.
Having missed many deadlines over the past few years, Adani also declined to give a timeframe on Thursday for beginning construction or the first production from Carmichael.
Adani shrank the project plans early last year to make it more affordable after running into problems lining up financing, as banks backed away from funding new coal mines under pressure from investors worried about climate change. [L4N1V83JS]
It now plans to start by producing around 10 million tonnes a year for the company's own use, eventually ramping up to 27.5 million tonnes for the first stage of the project. A mine of that size with a rail spur would typically take around two years to build.
Initial output is just a quarter of Adani's original plan to produce as much as 40 million tonnes a year spending A$16.5 billion to build a mine along with rail and port infrastructure.
The reduced plan only requires a 200-km (124-mile) rail spur connecting to Aurizon Holdings' rail line, rather than a whole new 388-km competing line, and no port expansion, which helped drive down the cost.
"The sharpening of the mine plan has kept operating costs to a mininum," Dow said in his speech.
"The project stacks up both environmentally and financially," he said.
The mine has battled a string of lawsuits from environmental groups, who argue it will contribute to global warming and damage Australia's Great Barrier Reef.
"We will fight this to the end. This is not a done deal," Australian Marine Conservation Society spokeswoman Imogen Zethoven said in a statement, saying the company still needed some final approvals.
Adani said the only approvals the project now needs are standard clearance for mine management plans.
($1 = 1.3672 Australian dollars)