Huge project clears one more hurdle, but financial uncertainty still hovers over the mine and related rail and port construction at Abbot Point

This article is more than 4 years old

This article is more than 4 years old

Adani has secured an environmental permit from the Queensland government to build Australia’s largest coal mine.

The Indian conglomerate was issued an environmental authority for its Carmichael mine, west of Bowen in north Queensland, by the department of environment and heritage on Tuesday.

It is one less hurdle for Adani’s highly contested plans, after its Australian chief complained last week that delays in government approvals were “incentivising” green activists to plot further legal challenges to stymie the company’s progress.

Adani still needs to obtain significant bank funding to realise its $16.5bn mine, rail and port project.

It must convince the Queensland government it has obtained “financial closure” before it will be allowed to begin dredging near Great Barrier Reef waters to expand the Abbot Point export facility.

Coal from Carmichael mine 'will create more annual emissions than New York' Read more

A lull in world coal demand and moves in India to rely less on imported thermal coal have cast doubt on the future of the mine.

Adani still has to obtain a mining lease from the Queensland government.

The state land court last year recommended resources minister Anthony Lynham approve the lease after a legal challenge by conservation group Coast and Country failed to persuade the judge that the mine would have any impact on Asian coal consumption.

One of the mine site’s traditional owners has challenged native title tribunal approval of the project in the federal court, but Lynham’s office has conceded it is able to issue the mining lease before the outcome of that challenge, after earlier expressing reluctance to preempt it.

Adrian Burragubba from the Wangan and Jagalingou clan has argued the tribunal denied natural justice by favouring Adani without properly investigating its claims, including that the mine would create 4,000 jobs, when the actual figure was closer to 400.

The Australian Conservation Foundation has also lodged a federal court challenge to commonwealth approval of the project under the Environmental Protection and biodiversity Conservation Act.

The mine, which alone would cost about $4.1bn to build, would produce up to 60m tonnes of thermal coal a year for sale in Asian electricity markets, notably to Adani’s own generators in India.

The ACF alleges federal environment minister Greg Hunt failed to account for the impact of emissions from Carmichael coal, which some analysts have argued could blow the world’s “carbon budget” to keep temperature rises below the 2C limit recently agreed at the Paris climate conference.

Adani still also has to reach compensation agreements with a number of remaining stakeholders, including local governments over the project’s use of their roads.

It must also finalise Indigenous land use agreements with traditional owners of the sites for associated works including an airstrip and workers’ accommodation.