Commonwealth Bank of Australia, the country's largest lender, has ended its role as financial adviser to Indian conglomerate Adani Mining's multibillion dollar Carmichael Mine, a further blow to the controversial project. The exit of CBA comes hard on the heels of a court decision on Wednesday revoking the Australian government's environmental approval for the coal mine, which at an estimated cost of up to $16 billion, is one of the world's biggest under construction. "We confirm that our advisory role has concluded. Due to client confidentiality we are unable to comment further," a CBA spokesman said. The development was first reported by Fairfax Media. Environmentalists hailed the CBA's decision and said it cast more doubt on the project's future. "As an adviser, Commonwealth Bank was in line to be a leading lender to Adani's Carmichael mega coal mine," said Julien Vincent, Executive Director at environmental campaigning group Market Forces. "Adani has not just lost hundreds of millions of dollars in debt finance that CBA could have brought, but the credibility that a major Australian institution's support brought to the project. That's a bigger, more embarrassing blow and could cost this project billions of dollars." "Eleven banks around the world have ruled out involvement in the Galilee Basin coal mines exporting through the Reef. With the US, China, Europe and India increasingly embracing renewables and the coal price in structural decline, pouring money into this dying industry doesn't make sense," said Senator Larissa Waters, Australian Greens deputy leader and climate spokesperson. Adani, which had suspended work in a number of areas on the mine because of delays in obtaining government approvals, said it had ended the bank's mandate over the holdups. "In the event the (government) approvals framework is not further undermined by activists seeking to exploit legal loopholes - thus enabling the project and the thousands of jobs and billions of dollars of investment it would bring to be delivered - Adani would happily work with the bank in future." (Agencies)
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An Australian court on Wednesday revoked the government's environmental approval for one of the world's biggest coal mines under construction in the Australian outback by Indian conglomerate Adani Mining. Environmentalists hailed the ruling against the controversial Carmichael mine as another setback for the project, estimated to cost up to $16 billion, which they say threatens two vulnerable species and will endanger the Great Barrier Reef. Adani, which recently suspended work in a number of areas on the mine as it awaits government approvals, attributed the ruling to a "technical legal error" and said it was confident the matter would be rectified. The Federal court ruled that the environmental approval granted to Adani in July 2014 by Australian Environment Minister Greg Hunt's office failed to include conditions to protect the yakka skink and ornamental snake. The Environment Department said Hunt would reconsider his approval in six to eight weeks, after taking into account an assessment of the impact on the two species. The challenge was launched by Mackay Conservation Group in January. Adani, which wants to ship millions tonnes of coal a year to India, has battled environmental opposition since starting work on the mine five years ago. "It's not project dead because of a stuff up by the environment department," Adani spokesman Andrew Porter told Reuters. Proponents argue the project is needed if Indian Prime Minister Narendra Modi is to keep his promise to bring electricity to hundreds of millions of people presently living off the grid. In April, French banks BNP Paribas and Credit Agricole said they did not intend to provide financing for coal mining in the Galilee Basin, joining several other European banks that have ruled out involvement on environmental grounds. Adani rival GVK is also seeking approvals to dig a mine in the basin, a 247,000-square kilometere expanse in north-eastern Australia. Adani said in a statement emailed to Reuters that it had been advised that a "technical legal vulnerability" had arisen because certain documents were not presented by the environment department in finalising the approval. "Adani is confident the conditions imposed on the existing approval are robust and appropriate once the technicality is addressed," the company said. The Environment Department said a "technical administrative matter" had arisen in the way advice was provided to the minister. "Without pre-empting a final decision about the project, the department expects that it will take six to eight weeks to prepare its advice and the supporting documentation, and for the minister to reconsider his final decision," the department said on its website. (Reuters)
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Sutanu Guru on why a decline in coal imports is both good and bad news In July, 2015, coal imports declined by 11 per cent to 19.3 million tons. This is the first time in more than one year that coal imports have declined. This seems in tune with the claims made by Union Coal Secretary Anil Swarup in July that the next three months will see a dramatic fall in coal imports. The steep decline in July also seems to in tune with a forecast made recently by Union Power & Coal minister Piyush Goyal that the current financial year will see an overall decline in coal imports to 210 million tons. Why should Anil Swarup and Piyush Goyal be happy with the steep decline in coal imports? According to them, one key objective of the Modi government when it came to power was to execute a strategy to dramatically increase domestic coal production in the country. Indeed, going by government statistics, coal output from state owned Coal India Ltd and other private producers increased by more than 40 million tons in the previous financial year. This increased domestic availability apparently led to a lower dependence on imports. The power and coal ministry has ambitious targets of almost doubling coal output in the country by 2019. For many years, the steep rise in coal imports by India had only become an embarrassment, but also a symbol of the economic policy failures of the UPA government. A brief recap of recent history is telling. In January, 2012, there were media reports that the then Joint Secretary Pulok Chatterjee of the PMO was given a specific task of heading a team to look into the problem of stagnating coal production and crippling power shortages. A few months after that, India had to face humiliation and derision as the entire grid in North India collapsed. From about 30 odd million tons a year of coal imports when he took over as Prime Minister in 2004, Dr Manmohan Singh left office in 2014 with annual coal imports in excess of 200 million tons. The relentless rise in imports continued even after Narendra Modi took over as PM and crossed 250 million tons in 2014-15. Not many mind the fact that India imports almost 80 per cent of its oil and gas needs. The country simply doesn’t have enough “discovered and recoverable” oil and gas. But India happens to have the third largest reserves of coal in the world. To import such massive amounts of coal when you are sitting on mountains of reserves is indeed scandalous. Add the coal block allocation scam that hit the UPA government and the dismal picture is complete. To that extent, the government deserves to pat itself on the back for at least reversing the trend of coal imports rising year after year. Yet, it is not all good news. The steep decline in imports in July reflects another ongoing crisis in the Indian power sector. Saddled with unpaid debts and dues in excess of Rs 4.5 lakh crores, power distribution companies in India simply do not have the cash to pay for power purchases. This, in turn, is forcing power generation companies to scale down output. The decline in July is evidence of that. Clearly, Minister Piyush Goyal has perhaps achieved just about 25 per cent of his ambitious targets related to coal and power. He has a little more than three years to achieve the balance 75 25 per cent.
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India's coal imports fell 11 percent to 19.3 million tonnes in July from a year earlier - the sharpest and the first drop in more than a year - as local supplies rose and money losing power generators held up purchases, commodities trader mjunction said. Prime Minister Narendra Modi has been credited with the turnaround in output by state-run Coal India, but he is now grappling with power distributors that are so deep in debt that they can't pay to buy power from generators. Power generators, as a result, are operating both below their capacity and last year's levels. "The demand for electricity from distribution companies is not growing the way it was projected to grow," mjunction Chief Executive and Managing Director Viresh Oberoi said in an email. "The poor financials (of distribution companies) that reduced their purchasing capacity is also one of the reasons for lower-than-expected electricity generation." India, the world's third largest buyer of foreign coal, imported 20 percent less of thermal coal used in power generation in July from a year ago, according to provisional data from mjunction. The last fall in total coal imports was in April 2015. Oberoi expects thermal coal imports to fall further, a prediction likely to cheer Coal Secretary Anil Swarup, who told Reuters late in July imports will come down "dramatically" in the next two to three months. Coal and power minister Piyush Goyal forecast imports will slide 3 percent in the year to next April, to 210 million tonnes, but government officials said actual purchases could be much lower. Government data on coal imports generally lags and varies from data from private firms such as mjunction, which collects information from more ports and includes additional coal grades. (Reuters)
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Former Jharkhand Chief Minister Madhu Koda, former coal secretary H.C. Gupta and seven others were on Friday put on trial by a special court in connection with a case pertaining to alleged irregularities in allocation of a coal block. Special Central Bureau of Investigation (CBI) Judge Bharat Parasar also framed charges against former Jharkhand Chief Secretary A.K. Basu, two public servants - Basant Kumar Bhattacharya and Bipin Bihari Singh - Vini Iron and Steel Udyog Ltd (VISUL), its director Vaibhav Tulsyan, Koda's alleged close aide Vijay Joshi and chartered accountant Navin Kumar Tulsyan in the case. The case pertains to alleged irregularities in allocation of Rajhara North (Central and Eastern) coal block in Jharkhand to VISUL. All these accused did not plead guilty to the charge framed against them and claimed trial after which the fixed the matter for August 17 for admission/denial of documents by them. "Separate charges against various accused persons have been framed. All the accused persons did not plead guilty and claimed trial," the court said. The court had ordered to put these accused on trial for the alleged offence of Section 120-B (criminal conspiracy) of the IPC. The court said Gupta also prima facie committed offence under section 409 (criminal breach of trust by public servant) of the IPC while Vaibhav Tulsyan, Joshi and VISUL prima facie committed offence of cheating under section 420 of the IPC. The charges under relevant provisions of the Prevention of Corruption Act were framed against five public servants -- Koda, Gupta, Basu, Singh and Bhattacharya. On July 14, the court had ordered to put these accused on trial noting that various acts of omission and commission committed by the accused prima facie made it clear that they had conspired with a "sole objective" to accommodate VISUL in Rajhara North (Central and Eastern) coal block in Jharkhand. The CBI, in its charge sheet, had said that VISUL had applied for allocation of Rajhara North coal block on January 8, 2007 to the Ministry of Coal. The CBI had alleged that although Jharkhand government and the Steel Ministry did not recommend VISUL's case for the coal block allocation, the 36th Screening Committee recommended the block to the accused firm. (PTI)
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To boost coal production , the government is working on a methodology for allocation of coal mines for commercial mining. "In order to augment production of coal to meet the demand in the country especially of the medium and small scale enterprises, the government is considering allocation of coal mines for commercial mining," Coal and Power Minister Piyush Goyal has said in a written reply to Rajya Sabha. "The methodology for allocation of coal mines for commercial mining is under deliberation," Goyal said. The minister further said Chhattisgarh Mineral Development Corp Ltd may apply for the allotment of coal mines for commercial mining as and when the notice inviting application is published by the Nominated Authority under the provisions of Coal Mines (Special Provisions) Act, 2015. In a separate reply, the minister said that a draft 'Model Contract Agreement' for mining of coal from auctioned/alloted coal mines in under finalisation. The government auctioned 29 coal blocks in two tranches early this year and had also alloted 38 coal blocks.(PTI)
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Adani Mining has suspended two major contractors on its $7.4 billion Carmichael coal project in Australia, the Sydney Morning Herald reported on Wednesday, raising fresh doubts about the project's future. Project manager Parsons Brinckerhoff and Korea's POSCO Engineering & Construction Co Ltd, which is also touted as an investor in the final project, were told late last week to stop work on the Carmichael mine, rail and port project, the newspaper said, citing sources. Company sources told the newspaper that senior Adani executives flew to India at the weekend for talks about the project's future. Both contractors have big roles in the project. Parsons Brinckerhoff are the principal project management consultants, while POSCO is due to build Adani's 388-kilometre (242 mile) rail line from the mine to the sea and take a financial stake in the development. Adani Mining said the latest suspension of work was due to delays in government approvals for the project. "The preliminary works contracts were previously sustained due to the level of investment Adani had maintained for more than 12 months in anticipation of a range of government decisions and approvals timeframes," Adani said in a statement. POSCO E&C said Adani had asked it to halt its design work as of July 16, with tentative plans to resume work in early October. Adani had raised concerns about the project's financing last month when it said it was rejigging the budget for the mine. Adani intends to ship most of the coal to India for use in generating household power, which would help Prime Minister Narendra Modi achieve his goal of connecting the whole country to the electricity grid during his tenure. The company said then that the project's budget, based on previous anticipated approval timelines and milestones, was no longer achievable due to delays in receiving various approvals from the Queensland state government. It also confirmed it had suspended the contracts of four engineering firms while waiting for those approvals. Adani has signed up buyers for about 70 per cent of the 40 million tonnes of coal the Carmichael project is due to produce in its first phase. The project mainly hinges on environmental approval to deepen a port on the fringe of the Great Barrier Reef in order to ship the coal, a proposal generating opposition worldwide. Greenpeace on Wednesday called on the Federal Environment Minister Greg Hunt to revoke the project's mining licence. "The burning of coal from Carmichael would produce 121 million tonnes of deadly carbon dioxide emissions every year at maximum production," said Nikola Casule,a Greenpeace climate and energy campaigner, "It would be a catastrophe for the climate and for the Great Barrier Reef." (Agencies)
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Mining giant Adani Group's $16.5 billion dollar coal mine project in Australia's Queensland has run into another controversy after reports that senior bureaucrats were sidelined over key decisions on the deal for the venture which was red-flagged by many officials.Documents obtained by the ABC News under the Right to Information laws showed that the Queensland Treasury and the Department of Premier and Cabinet were frozen out of key government decisions about the controversial Carmichael mine project. "Senior Treasury bureaucrats were even uninvited from a high-level meeting involving the company and the Department of State Development", the ABC report said. The documents outlining negotiations also show the confusion and suspicion among high-ranking Queensland bureaucrats about the decision-making process, it said. The report cited the then head of Treasury's warning, saying, "I would prefer to keep at arm's length at present, and not get trapped into a set-up. The documents showed the set-up he feared was not from Adani, but from the Department of State Development under then deputy premier Jeff Seeney, whose department was driving the negotiations with the Indian mining giant. Those talks led to draft agreements that were signed without consultation with the Department of Premier and Cabinet or with Treasury". It said that in one email, a Treasury official complained about how the Department of State Development was handling the drafting of a paper about rail and infrastructure options for the Galilee Basin, saying a colleague in State Development was most reluctant to give me any detail or the actual paper. In November 2014, the Department of State Development signed a series of agreements with Adani, including an infrastructure investment agreement and a statement of intent which was news to then Treasury head Mark Gray. Gray emailed seeking details from his counterpart in Department of State Development, David Edwards, stating,"Hi David, I understand from the Treasurer that some document or agreement was signed today with Adani. Would you please be able to send through a copy for our information"? Earlier Wednesday, the Sydney Morning Herald also claimed that Treasury officials had warned the former state government that the project was inviable. Adani spokesperson declined to comment on the latest reports but quoted the Treasurer's office as saying that the views raised in the RTI documents relate to the former Liberal National Party government's interactions with Adani. They do not reflect the views of the current government or Queensland Treasury. Former Under Treasurer Mark Gray is no longer with Queensland Treasury, the Treasurer's office was quoted as saying by the Adani Group. (PTI)
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