Adani's $7 Billion Australian Coal Project Gets Green Signal

15/10/2015 11:46 AM IST | Updated 15/07/2016 8:25 AM IST
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AHMEDABAD, INDIA - JULY 19: Chairman Of Adani Group Gautam Adani poses for a profile shoot during an interview on Jlu on July 19, 2010 in Ahmedabad, India. (Photo by Ramesh Dave/Mint via Getty Images)

SYDNEY -- The Australian government on Thursday reissued an environmental permit for construction of one of the world's biggest coal mines to India's Adani Enterprises, after clearing concerns about two rare outback species.

The decision by Environment Minister Greg Hunt opens the way for Adani to proceed with the A$10 billion ($7 billion) project in the undeveloped Galilee Basin that promises to generate billions of dollars in export revenue for Australia.

Shares in Adani jumped as much as 13 percent in Mumbai on news of the reissued permit.

Adani, which wants to ship 40 million tonnes of coal a year in the mine's first phase, has battled opposition from green groups since starting work on the project five years ago.

A court in August temporarily blocked progress on the mine following a claim Adani failed to take into account the welfare of the yakka skink and ornamental snake.

"The conditions I have imposed take into account issues raised by the community and ensure that the proponent must meet the highest environmental standards," Hunt said in a statement.

The conditions include protecting and improving habitat for an endangered finch, protecting groundwater and providing A$1 million in funding for research to improve conservation of threatened species in the Galilee Basin.

Also Read: Adani Is Still Waiting For A Coal Mine Permit From Australia

Also Read: Australia's Largest Bank Ends Adviser Role In Blow For Adani's Coal Mine Project

The project's proponents argue it is needed if Indian Prime Minister Narendra Modi is to keep his promise to bring electricity to hundreds of millions of people living off the grid. Critics are concerned greenhouse gases from burning coal will hinder efforts at combating global warming.

Several French and German banks have said they will not provide financing for coal mining in the Galilee Basin, while Standard Chartered and Commonwealth Bank of Australia pulled out of the project in August.

"Minister Hunt is sacrificing threatened species such as the Black Throated Finch and precious ground water resources for the sake of a mine that simply does not stack up economically," Ellen Roberts, co-ordinator of the Mackay Conservation Group, said on Thursday.

Adani, which stills needs state government approvals including a mining lease and permission to dredge for a port, has yet to line up funding.

"It is certainty over the remaining approvals that is now key to the company progressing its plan to deliver mine, rail and port projects in Queensland that will deliver 10,000 direct and indirect jobs, and A$22 billion in taxes and royalties," Adani Australia said in an emailed statement.

While a push in India to rely more on solar and wind power and domestic coal has raised questions over the viability of the project, Adani has said the majority of Carmichael production had been pre-sold, guaranteeing revenue.

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