Indian mining giant Adani has scaled back its plans for a massive coal mine in Queensland as it tries to stitch up funding for the project.
The original $16.5 billion dollar Carmichael coal mine in the Galilee Basin would have seen an output of 60 million tonnes of thermal coal per year at its peak.
That’s now been scaled back to an initial outlay of less than $2 billion for the first stage of the project.
Initial output will sit at around 15 million tonnes a year, with capacity to ramp that up to 27 million tonnes.
Adani Mining CEO Lucas Dow says it will be easier to secure funding for the project now it has been downsized.
The project has been struggling to attract financial backing.
‘This capital-efficient approach is practical, achievable and will allow us to deliver coal to our customers sooner and to take advantage of strong demand,’ he said in a statement.
‘We are close to finalising finance as the recent mine and rail decisions have significantly simplified the finance requirements for Carmichael.’
Australia’s big four banks have refused to put up money for the project, forcing the company to look for funding overseas.
Queensland Premier Annastacia Palaszczuk last year vetoed any loan from the federal Northern Australia Investment Fund to help Adani build a rail line to the mine site.
She has repeatedly said the project must stand alone and will not receive taxpayer support.
The Queensland government has struck a royalties deal with the mine, and any others that open in the Galilee Basin, deferring the payment of some royalties.
Adani’s announcement on Thursday coincided with a new report warning Australia’s thermal coal exports could plummet faster than expected as demand drops in Asia.
The study by the Institute for Energy Economics and Financial Analysis warns the top export markets for Australia’s thermal coal – China, Japan, Taiwan and South Korea – are shifting to renewables.
Adani’s Queensland mine is set to primarily export to the company’s own power production operations in India.