Work on one of the world’s biggest coal projects has ground to a halt with the Indian coal giant Adani dissolving the project management team behind its controversial Carmichael mine in Queensland.

Adani last week dismissed 50 staff involved in taking the mine, port and rail project to construction, including from a key potential investor, Posco, in a move that raised further questions about the future of the $16.5bn project.

The company said it remained committed to the mine and insisted the move, which leaves only a small legal and approvals team engaged in the project, was linked to the suspension of engineering contractors last month.

“These structural changes are connected to the same engineering contracts and preliminary works variations Adani announced last month,” a spokeswoman said.





Posco senior managers, who had been working on the project for a year out of the Brisbane office of the engineering contractor Worley Parsons, will return to Korea.

The Korean steelmaker had been in talks with Adani about taking equity stakes in the mine and rail link, and attracting $1bn in funding from Korean banks.

Staff from Parsons Brinkerhoff, which was contracted as lead project manager last October, have also been stood down.

Posco’s non-binding agreements to invest in Adani’s project were reached when the former state government had indicated it would invest $445m, despite concerns by treasury officials about the transparency of Adani’s funding structure and the mine’s viability.

Tim Buckley from the Institute for Energy Economics and Financial Analysis said the departure of Posco staff was a “critical” development.



“Posco by pulling out of Australia doesn’t mean the whole deal’s dead but it makes it so much harder because it’s so critically dependent on Korea,” he said.

“Who is the bank that’s actually funding it? There isn’t any. Korea was the major funder supposedly on the book. This is a major body blow. It’s probably the death knell.”

Greenpeace called on federal environment minister Greg Hunt to revoke Adani’s mining licence for Carmichael and rule out any taxpayer subsidies of the project through the Northern Australia infrastructure fund.

“Australian taxpayers do not want their money propping up dirty, unviable, uneconomical coal mines,” Greenpeace campaigner Nikola Casule said.

“At 28,000 hectares, the Carmichael mine would be both environmentally disastrous and financially unsustainable. The burning of coal from Carmichael would produce 121m tonnes of deadly carbon dioxide emissions every year at maximum production. It would be a catastrophe for the climate and for the Great Barrier Reef.”

Adani said delays in government approvals had forced it to rearrange its timelines, but the Queensland government denied it was the source of any delays.

Guardian Australia reported last month that Adani had suspended work by dozens of engineers from WorleyParsons and Aecon, Aurecon and SMEC, a move industry sources said made no strategic sense as a savings measure.

Adani has weathered a sustained campaign against the project from environmental groups, who cite the impact of the 60m-tonne-a-year open cut coal mine on global carbon emissions, and of shipping and port works on the nearby Great Barrier Reef.