There appears to be no end to the woes of Adani Group’s Carmichael mine project in Queensland, Australia. Two companies have decided to end their association with Adani’s Carmichael coal mine and several insurance companies have refused to be part of the project.
Earlier this week, Australian infrastructure firm Cardno announced that it is terminating its work for Adani’s project.
Australian media reports say that Cardno’s chairman Michael Alscher even went to the extent of asserting that the company would not seek any future tenders with Adani mining. According to a report in Australian Associated Press, this is what Alscher told Cardno’s annual general meeting in Sydney on Thursday, 10 October:
- “As a company we have decided that we will no longer do any further work with the company (Adani),” Alscher told the Cardno annual general meeting in Sydney on Thursday, according to the report.
- “Given the project and the controversy around that, it is best if we not participate in the project at all.”
- "We took into account commercial and social factors, our company values as well as feedback from other clients and our employees”.
- "We understand that there are many supporters of the project. However, we believe this is the right decision for our business and our people."
- Asked whether financial concerns came into play, Mr Alscher said the company considered “the matter from every perspective".
In August this year, global engineering and consultancy firm Aurecon also ended its long association with the Adani group. Aurecon wasn’t directly involved with the mining part of the project but it had been the engineering, procurement and construction contractor at the Abbot Point coal terminal since 2005. Adani bought the terminal in 2011. Abbot Point will be providing facilities for the export of the coal produced at the Carmichael mine.
Reacting to Aurecon’s withdrawal, Adani group said in a statement:
- “While we are surprised by the decision, given the positive long-term relationship and the fact that we are not aware of any commercial issues or disputes between our companies, we value the work that Aurecon has delivered for our port and renewable energy businesses.”
- “There has been a concerted campaign by extremists against our Carmichael project and businesses that partner with us. It has not succeeded and construction of the Carmichael project is well and truly under way.”
- “We have repeatedly demonstrated that we will not be intimidated or deterred from delivering on our promises to Queenslanders, Australians and the people in developing nations who desperately need affordable energy to help lift them out of poverty.”
Aurecon’s decision also received a harsh response from Australia’s natural resources minister Matt Canavan, who called the company a bunch of “bed wetters”. He accused Aurecon of succumbing to pressure.
Canavan has been one of the strongest advocates of Adani’s mining project and a vocal critic of the environmentalists who have been opposing it.
He visited India in August this year, barely a week after Aurecon’s withdrawal. He met with Adani Group chairman Gauram Adani and urged him to expedite work on the Carmichael mine.
He also met three ministers of the Narendra Modi government such as Railways Minister Piyush Goyal, Petroleum Minister Dharmendra Pradhan and Minister for Coal and Mines Prahlad Joshi.
Insurance Trouble
Earlier this month, two insurance companies distanced themselves from Adani’s Carmichael mine project.
According to a Reuters report dated 2 October, Axis Capital ruled itself out of providing insurance coverage for Adani’s project and withdrew its quote for the insurance of the mine’s railway. The report said this this could be part of Axis Capital’s policy to distance itself from coal projects.
A story in The Guardian said that another insurance company Canopius, which had reportedly held discussions with a broker about insuring the construction of Adani’s railway line, has also distanced itself from the project.
According to lobby group Market Forces, 14 large insurers including AXA SA, Allianz, Liberty Mutual Insurance, Munich Re, Swiss Re and QBE Insurance Group Ltd have already confirmed they will not insure the Carmichael mine.
Adani’s Carmichael mine project has been mired in controversy from the beginning. Environmentalists in Australia alleged that the project could cause damage to the Great Barrier Reef and also flagged the increase in carbon emissions that the project could cause. The Carmichael mine is expected to achieve an annual production of 8 million to 10 million tonnes of coal.
Due to environmental concerns, several banks also reportedly refused to finance the project.
(At The Quint, we question everything. Play an active role in shaping our journalism by becoming a member today.)