Adani Group is upbeat about the re-election of Australian Prime Minister Scott Morrison who has been a supporter of coal projects and has backed the group’s controversial mining project in Queensland. The group believes that the state government would have to pay heed to the “people’s mandate” and give all the necessary approvals needed for the project to take off.
Facing environmental issues such as droughts, floods, bushfires and potential damage to natural life, people of Australia were expected to vote for the opposition Labor Party which has set ambitious targets for renewable energy and carbon emission cuts and has opposed Adani’s project despite the prospect of job creation. But the surprise victory of the Liberal Party-led coalition, which has no stated policy for renewables and is supportive of coal projects, may clear the way for Adani’s project.
“The federal election result shows a clear and strong support for our project in the area where we will be operating, at Queensland. This is a positive endorsement for the coal mining industry in Australia. The message from the people is strong and resounding and the government should execute the will of the people,” Lucas Dow, CEO of Adani Mining in Australia, told ET over a telephone call.
Back home, shares of Adani Group companies rallied on Monday after exit polls predicted the Bharatiya Janata Party (BJP)-led coalition could win by a majority in the General Elections. Shares of Adani Enterprises rallied 29 per cent while Adani Green Power surged over 16 per cent. Other group stocks including Adani Transmission and Adani Gas, too, rallied in the range of 8-15 per cent, data showed. The benchmark Sensex closed 3.7 per cent higher on Monday. Market participants perceive that Adani group would beenefit from the BJP returning power.
The Gautam Adani-led project has been marred in controversies but has been backed by the central government in Australia given its promise of creating jobs. The project has received all approvals from the federal government but has two pending approvals with the state government on Queensland, ruled by the Labor Party which doesn’t favour the project that could potentially damage the environment in the area.
Climate change was at the core of the recent Australian federal elections, with reports claiming that opposition to the Adani project worked against the Labor Party. The project has been in the centre of controversies for almost nine years with environmentalists warning of severe damage to the Great Barrier Reef and local species.
After years of struggling with controversies and inability to tie up finances for the projects, the company has decided to take smaller steps. It has scaled down its plans to develop the project with an investment of A$2 billion to produce 10 million tonne per annum, as against the original plan of investing A$16.5 billion on the Carmichael coal mine in the Galilee Basin to produce 60 million tonnes of thermal coal a year at its peak.
Adani needs the state government’s approval for its environmental management plans. These include the management plan for the black-throated finch, an endangered bird species, and the groundwater dependent ecosystem management plan.
Dow said this could come through in a “few weeks,” and construction can then start at the project. There will be other approvals that would be needed later, which would be linked to certain milestones.
News Source: The Economic Times