In a transcript on the Indian company’s website, Adani Enterprises chief executive of mining Vijay Prakash said there had been no change in timelines for the project.
“The work is proceeding well,” Prakash said.
“In terms of the run-rate of expense on the mine is somewhere between $56-$70 million on a monthly basis so each year the construction expenditure compared to the general numbers will be round about $840 million and then there will be some payment at the very end.
“It is continuing well as planned and this COVID situation has not affected the construction because the regional area is in our favor.”
Adani has about 500 workers on site and recently awarded a $220 million rail contract to Martinus.
“Workers have also started to move into the first of our three temporary rail accommodation camps. The three temporary rail camps combined will deliver an additional 1200 beds for the project workforce. We remain on track to create more than 1500 direct jobs during the construction and ramp up of our project and some further 6750 indirect jobs,” Adani said.
Coal prices have plunged in recent months as demand dries up because of the global shutdown caused by the COVID-19 pandemic.
Prices for the benchmark Newcastle thermal coal have fallen to about $US50 a tonne ($A75) and Adani’s product has been estimated to be well below that level which, along with falling demand for electricity, has raised speculation that the project was not viable.
Adani’s plan is to use a portion of the coal for its own electricity generators.
Adani has maintained the economics of the project were strong.
The project has yet to make a deal with the State Government over royalties for the Carmichael coal, but this week announced a scholarship program.
Activists were also dealt a setback last week when the insurance broker previously used by Adani, Marsh, rejected demands that it dump the company.
Galilee Blockade spokesman Ben Pennings said Adani were smarting about an analysis by Bloomberg, which questioned the Carmichael viability. Bloomberg also reported that Adani’s most recent financial accounts said the Australian mine would not be paying tax in the foreseeable future.
“Adani invested big in thermal coal at the top of the price cycle and the wrong time in history,” Pennings said.
“They are desperate to keep Abbot Point Coal Terminal viable in the midst of low coal prices and an international economic downturn that suits investment in renewables.
“Ultimately, they are throwing good money after bad. We believe continued pressure on insurers, financiers and contractors will cause their corporate house of cards in Australia to collapse.”
Adani has rejected the claims in the Bloomberg analysis saying it applied industry standard techniques for the purpose of calculating fair value of our Carmichael asset and had included independent external third parties to undertake such valuation work.
“We also utilise independent third parties for the provision of long term commodity price forecasts and FX forecasts for incorporation into the valuation of the asset,” the company said.
“Given that Carmichael construction is now well progressed the project is significantly de-risked from an execution perspective which of course translates into a lower discount factor.
“Construction of the mine and rail project is continuing on schedule, with railway and mine works being undertaken in line with strict measures to manage the risk of the COVID-19 virus.”
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