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Rise and rise of Adani: Carmichael mine may triple in size as part of planned expansion

Coal mining firm Adani has revealed it has been planning a major expansion of production at its $3 billion Carmichael mine to as much as 30 million tonnes over the next three years.

May 30, 2022, updated May 30, 2022
The Bravus (Adani) Carmichael mine in central Queensland

The Bravus (Adani) Carmichael mine in central Queensland

Transcripts from an investor conference at its headquarters in India held earlier this month suggest the company is keen to cash in on the high prices for coal and that it had made four shipments from Australia this year. However, strong income was not expected until later this year.

The Carmichael mine has Government approval to produce 60 million tonnes a year, but the company scaled this back several years ago when prices for coal fell and it was struggling to raise capital. Since then, coal prices have soared to record levels and Adani’s financial capacity had also improved.

India is also desperate for coal.

The company said even at lower prices the Carmichael mine would produce strong cashflow.

Adani Enterprises director Vinay Prakesh said production from Carmichael was slowly improving while chief financial officer Robbie Singh said the company had capitalised $3 billion against the development of the project.

“In this financial year (full year 2023) we are planning to cross 11 to 12 million tonnes of exports out of Australia.” Prakesh said.

“We did the first shipment in January, the second shipment in March which came in April and now in May onwards. We are planning to have four shipments a month and then moving it to five or six and then seven shipments a month with capesize vessels.

“As far as Australia is concerned, we are trying to achieve annual capacity of 15 million tonnes in this financial year (2023). As you are aware, that currently the coal prices are at the highest levels so definitely we do see a good cash flow but it is going to be reflected from September onwards.

“Now for the expansion plan. We are resolving logistic issues (the) mine is definitely there to 25 million tonnes if we can get all the links in place. We can definitely go beyond 15 (mtpa) and may touch 25 million tonnes to 30 million in the next two to three years’ time.

“You can expect a good cashflow coming from this mine in the future despite continuous prices at the current level and even if it goes down also you can see a good respectable cashflow coming from Australia.”

He said the mining costs were being reduced and the company expected good cash flow in the future even at lower coal prices.

Prakash said prices for coal from Carmichael should be at least $US100 a tonne.

Earlier this month, In Queensland reported that investment firm Vanguard had sought to understand from Adani how the Carmichael mine aligned with the company’s transition plans and its strategy to reduce its exposure to thermal coal.

“Company leaders said they have capped the size of the mine and intended to set an end date for operations to fit within the parameters of a 1.5 degree warming scenario,” Vanguard said in its annual report.

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That end date was believed to be 2046, well short of the 90-year time frame under its licence.

Adani’s Australian operations were asked for comment.

“The Carmichael Mine has been built to initially export in the order of 10 million tonnes of high-quality thermal coal per annum,” a spokesman said.

“While we hold environmental approvals for production of up to 60 million tonnes per annum, any further expansion beyond 10 million tonnes per annum will be subject to board approval.”

 

 

 

 

Vinay Prakesh director Adani Enterprises

Robbie Singh chief financial officerF

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