Carmichael plan details no mining or construction, which would trigger a Queensland government demand for funds to pay for land rehabilitation

This article is more than 3 years old

This article is more than 3 years old

Adani has kept an operating plan for its unfunded Queensland mine to just six months, postponing an expected legal obligation to provide a billion-dollar rehabilitation bond before financial backing emerges.

The miner has provided the state government with a plan that covers only up to the end of 2017, which falls before its deadline for securing US$2.5bn in financial backing to execute the first phase of Australia’s largest proposed coal project.

The Carmichael mine plan of operations details no mining or construction works, or resulting areas of land disturbance, which would trigger a government demand for financial assurance for environmental rehabilitation.

Adani would then have to provide a bank guarantee or cash bond that environmental group Lock The Gate Alliance has predicted could ultimately be worth $2bn.

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Lock The Gate said a six-month plan of operations was unusual and five years was more common.

Its campaigns co-ordinator, Carmel Flint, said Adani’s was a “bizarre” plan that showed the company was “not prepared to start work in earnest, and, more likely, that they doubted their own ability to obtain the financial assurance required”.

“Adani keep saying they are ready to start this mine, but their actions keep telling us otherwise,” Flint said. “We’re calling on the Queensland government to reject this weak, short-term plan of operations and prevent any work starting until Adani can provide a detailed five-year plan setting out how they will undertake all mining and rehabilitation.”

Ron Watson, a spokesman for Adani, said it was his understanding that “most mines in Queensland are on six- or 12-month plans”.

He said Adani’s target for reaching financial closure for the project remained the end of 2017 but “definitely by March 2018”.

Adani’s plan itself notes that it “will be amended in due course to include all early works related to commencement of construction activities for the mine and related infrastructure works”.

Lock The Gate’s Rick Humphries, a former mining industry expert on closures and rehabilitation costs, said the length of operation plans for Queensland mines varied. But a six-month plan was “highly unusual” – Humphries said he had never seen one before.

TerraCom recently lodged a 12-month plan for the former Rio mine Blair Athol but there were “plenty of others around that are five years”, he said.

Adani’s previously announced “final investment decision” by the board of its Indian parent was the trigger for what executives flagged as an inter-company transfer of $100m to $400m for “pre-construction works”.

These works would involve “surveying, soil testing and design work for the mine, the airstrip, mining camp, access roads, and the rail link”, the spokesman told ABC.

Flint said the operations plan encompasses only “the re-establishment of site signage, the re-commissioning, expansion and operation of an existing temporary camp, and use of existing tracks and muster points within the earlier exploration domain”.

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A number of potential stumbling blocks, in addition to the need to secure lender backing, remain before Adani can execute the project.

It must deal with legal challenges brought by some traditional mine site owners from the Wangan and Jagalingou people, with a federal court trial set down for October and the timing of its resolution unclear.



The Guardian has revealed that Adani lost majority support among Wangan and Jagalingou representatives for a land access deal, casting further doubt on moves to implement the crucial agreement.

Adani has also flagged assessing its options when the taxpayer-funded Northern Australia Infrastructure Facility rules on its request for a $900m loan for its mine rail link.

A Reachtel poll of 4,712 people across seven electorates held by senior federal government ministers, including the prime minister, Malcolm Turnbull, has showed opposition to a Naif loan for Adani ranging from 53% to 70%.



The poll, released on Monday, was commissioned by left-leaning thinktank the Australia Institute.