Adani has parted ways with construction contractor Downer. Credit:AAP Indeed, "pre-construction work" on the Galilee Basin mine is to begin in the September quarter on a project that has so far cost the company $3.3 billion – including the purchase of Abbot Point coal port. The Carmichael projects will generate 10,000 direct and indirect jobs, it said. Interestingly, though, Adani omitted any number on the cost of the project. Is it $16.5 billion and Australia's biggest proposed coal mine, as so often claimed? A lot else was left unsaid, not least that the mine is yet to receive definitive financial close.

Queensland Premier Annastacia Palaszczuk. Credit:Bradley Kanaris Not so mega That's why Downer EDI, one of the expected beneficiaries on Tuesday only said it had received "further clarification of the scope of work to be done and the process for negotiating a binding mining services contract". The Queensland government is keenly aware what is being proposed so far by Adani is not a "megamine", as Treasurer Curtis Pitt noted last week. Carmichael "is certainly smaller than many mines around the world", Pitt said. Adani not yet ready to roll. Credit:Glenn Hunt

True, the $4 billion-odd mine being discussed in the Queensland cabinet might one day be expanded towards the original 60 million tonnes-a-year monster that has fossil fuel fans drooling and environmentalists fuming. But that "might" needs many unlikely factors to fall its way. Can Adani get a $900 million loan from the federal government for a 400-kilometre railway to link mine and port, for instance? Can it get over remaining legal challenges, not to mention the protests from environmental groups determined to head off another giant source of greenhouse gases that will help cook what remains of the Great Barrier Reef, and all the tens of thousands of tourism jobs dependent on that? "We have been challenged by activists in the courts, in inner city streets, and even outside banks that have not even been approached to finance the project," Gautam Adani, the company's chairman, intoned in Churchillian terms, omitting all but the beaches.

"We are still facing activists. But we are committed to this project." Biggest hurdle The highest hurdles, though, have always been thrown up by the investment and financial community. With Australian banks ruling out support, international investors are left to wonder what they know about the mine's viability. Investment bank UBS's commodity team reviewed the prospects of Galilee coal in 2013. The team estimated then a $110 a tonne thermal coal price would be needed for the projects there to be viable. Even assuming some costs may be lower now, the outlook for coal is, if anything dimming, further.

That sum compares with KPMG's forecast last month of Newcastle's benchmark coal trading below $US65 ($87) a tonne for years to come – even before a discount is applied to Carmichael's typically poorer quality coal. (See KPMG's forecast Newcastle coal benchmark price chart below.) It's not only that the coal price remains nowhere near what would make Galilee's lower quality coal profitable, especially when compared with Hunter Valley's exports. But also that the whole "pit to plug" plan Adani was touting – digging, shipping, and burning its own coal – is looking increasingly dubious. Tim Buckley, a former Citi analyst and now director of the coal-sceptic Institute for Energy Economics & Financial Analysis, notes the news at home just gets worse for Adani.

Adani Power declared on Monday it was considering selling control of one of its biggest coal-fired power stations mostly because it could not compete with domestic coal. And India has vowed to ban imported coal within a year to save foreign exchange. Loading With Carmichael's prospects bad and getting worse, for Buckley the biggest question might be why Australian governments and the hopeful suppliers are being dragged along for the ride. "What game are they playing because Adani is not getting to financial close today," Buckley says.