Australian state approves mega India-backed coal mine

In this photograph taken on Feb 18, 2011, Indian workers use heavy machinery to sift through coal at the Adani Power company thermal power plant at Mundra some 400kms from Ahmedabad. -- PHOTO: AFP
In this photograph taken on Feb 18, 2011, Indian workers use heavy machinery to sift through coal at the Adani Power company thermal power plant at Mundra some 400kms from Ahmedabad. -- PHOTO: AFP

SYDNEY (AFP) - An Australian state government on Thursday approved a massive Aus$16.5 billion (S$19.23 billion) mine development, saying the Indian-backed coal mine could be among the largest in the world.

Indian firm Adani's proposed Carmichael coal mine and rail project in central Queensland is subject to dozens of environmental and social conditions and is yet to receive the federal government green light.

But Queensland's minister for state development Jeff Seeney said if it were to go ahead, the development would play a major role in opening up the state's resource-rich Galilee Basin.

"This project has the potential to be the largest coal mine in Australia and one of the largest in the world," Seeney said after the state's coordinator-general signed off on the deal.

The project proposes a combination of open-cut and underground coal mining and is forecast to produce 60 million tonnes of thermal coal a year for export, Seeney said.

He added that the mine and rail project would boost the economy, having the potential to create up to 2,500 construction and 3,900 operational jobs.

"It is expected to generate over Aus$500 million annually in direct and indirect benefits to Queensland's economy during construction and Aus$3 billion at full export capacity," he said.

The state government has established 190 conditions to protect landholders, flora, groundwater resources and air quality as well as controls on dust and noise during construction and operation.

"In relation to groundwater and water bores, Adani will be required to reach make-good agreements with all affected landholders including the identification and provision of alternative water supplies," Seeney said.

"Adani will also be required to contribute water monitoring data and funding to a Galilee region water resource model."

The anti-coal group Lock The Gate attacked the decision, saying it would have a devastating impact on water resources, but Adani's global chairman Gautam Adani stressed the development would meet global standards.

"We remain committed to delivering the multi-billion dollar project, with world class standards," he said according to Australian Associated Press.

Adani also won approval in December for a major coal port expansion on the Great Barrier Reef coast, under strict environmental conditions, sparking anger from conservationists.

It is permitted to dredge three million cubic metres of material from the seabed to allow freighters to dock at the port in Abbot Point, lifting the facility's capacity by 70 per cent to make it one of the world's largest coal ports.

On its web site, the firm said the Carmichael project envisaged all coal being transported via a privately owned rail line connecting to existing infrastructure owned by an Australian operator, and shipped through Abbot Point and/or another port at Hay Point.

The Galilee Basin project will have have an operating life of approximately 90 years, with the exported coal predominantly destined for the Indian market.