'Adani suspends 2 key contractors on biggest Aus coal project'

Adani Group's 16.5 billion dollar coal mine project in Australia has hit another controversy after reports that the Indian mining giant suspended two major contractors, raising fresh speculation over funding even as the company blamed the move on delay in government approvals.

Melbourne: Adani Group's 16.5 billion dollar coal mine project in Australia has hit another controversy after reports that the Indian mining giant suspended two major contractors, raising fresh speculation over funding even as the company blamed the move on delay in government approvals.

Key project managers Parsons Brinckerhoff and South Korean construction company POSCO, also touted as an investor in the Queensland coal project, were told late last week to stop work on the Carmichael mine, rail and port project in the Galilee Basin, the Sydney Morning Herald reported today.

The report cited company sources as saying that senior Adani executives flew to India over the weekend for talks about the future of the project involving Australia's largest coal mine.

The suspension comes less than a month after Adani stood down four engineering firms - WorleyParsons, Aecon, Aurecon and SMC - and scores of workers involved in preparatory works on the development, which would open up Queensland's vast Galilee Basin.

The suspension reports raised fresh speculation about the company's ability to finance Australia's largest coal mine.

"It seems to me like they're at the crossroads of do they continue or do they do what (Indian conglomerate) GVK did and sack everyone," a source was quoted as saying in the report.

"I think they just don't have the money and can't get the money to go ahead. I think, one, Adani don't have the money, and two, they are realising this is a long, drawn-out process."

An Adani spokesperson dismissed them, saying "suggestions in a media report of a fresh decision in relation to project management and execution contracts are simply not true".

"As indicated when asked, the current changes are connected to the same engineering contracts and preliminary works variations Adani announced last month. The preliminary works contracts were previously sustained due to the level of investment Adani had maintained for more than 12 months in anticipation of a range of government decisions and approvals timeframes," Adani said.

"As we announced on June 24, 2015, a number of changes in the approvals processes meant these timeframes had to be adjusted," the company clarified.

In the past, Adani's ambitious project has run into controversies and is facing legal challenges from indigenous landholders and conservation groups.

Greenpeace called on federal environment minister Greg Hunt to revoke Adani's Carmichael mining licence following the reports about the suspension of contractors.

"This is yet another sign of a doomed project," said Greenpeace climate and energy campaigner Nikola Casule.

"This comes after four engineering firms had their work shut down by Adani in June, 11 international banks have said they won't fund the project, and Queensland Treasury officials have called the project 'unbankable'.

"The risk for potential investors in the Carmichael mine is getting worse and worse," he said.

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