The Adani group receives a nod from the state of Queensland, Australia for the company’s management plan to protect the endangered bird. The approval is one of the two permits the company requires to start the construction of the mining project.
Adani Group’s Carmichael coal project is located in Australia’s remote area in North Galilee Basin. It covers around 2,50,000 square kilometres. This project has the potential of increasing Australian coal exports to more than double. Adani has been working to receive approvals for the Carmichael mine project for almost a decade. The process for acquiring the approvals have been slow due to the rising concerns related to climate change.
Australian election impact
The outcomes of the recent Federal Election of 2019 in Australia was in favour of Adani enterprises’ project. The Coalition Party’s victory over the Australian Labor Party is a good sign for the company. Australia’s pro-coal Coalition Party is an alliance between the Liberal Party and the National Party of Australia. Opinion polls indicated the victory of Australian Labor Party.
Nevertheless, the Coalition party returned to power contrary to the result of opinion polls. The Coalition Party has always been in favour of the mining project, contrary to the Labor Party which took a firm stand against it.
Approval from the Department of Environment & Science (DES)
The Department of Environment and Science approved Adani’s project for the protection of endangered bird species, Black-throated Finch. DES ensured, that Adani’s complied with multiple norms & regulations. It was also kept in mind that Adani’s plan was vigorous and well-planned. The motive of protecting the endangered species was quintessential.
Hurdles in the project
The Adani group has faced multiple hindrances for securing finance to fund the mining project & accompanying railway network. This is due to environmental concerns over new thermal coal development & declining coal prices. Due to investor’s hesitation in the plan, the group decided to self-finance the project.
The Carmichael coal project will continue to face problems despite approvals on account of mining economics. In order to achieve the break-even point, the price of thermal coal should be at $100/ton. The prevailing prices of thermal coal in the industry is below $85/ton.
Final Permit
The final approvals in the pipeline have now been narrowed down to one. Management approval for protection of Black-throated Finch was amongst the last two approvals. The only pending approval which remains is related to the management of a sensitive groundwater source. It is expected to be issued by mid-June 2019.
Conclusion
The outcomes form the Federal Election 2019 have been favourable to the company’s mining project. The project will enhance the coal exports of the company along with thousands of employment opportunities. The multiple efforts of the company have started to show positive results. The company requires just one more approval to start the construction of the project. Adani Enterprises is trading at Rs 155.95 on 3rd June’19, up by 1% from its previous closing.
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