Controversial India-backed coal project awarded mining leases in Australia

Workers unload coal from a supply truck at a yard on the outskirts of the western city of Ahmedabad, India.
Workers unload coal from a supply truck at a yard on the outskirts of the western city of Ahmedabad, India.PHOTO: REUTERS

SYDNEY (AFP) - A controversial India-backed giant coal project near Australia's Great Barrier Reef was on Sunday (April 3) awarded mining leases, but developer Adani said it would not commit to a final investment decision until legal challenges against it were resolved.

The Queensland state government said the A$21.7 billion project to build one of the world's biggest mines was awarded three leases.

"This is a major step forward for this project after extensive government and community scrutiny," Queensland Premier Annastascia Palaszczuk said in a statement.

"Stringent conditions will continue to protect the environment, landholders' and traditional owners' interests, and our iconic Great Barrier Reef."

The state government added that the mining leases at Carmichael in the Galilee Basin were estimated to contain 11 billion tonnes of coal.

Adani welcomed the announcement, saying the leases gave the Indian conglomerate certainty and the firm had the "clear aim of commencing construction in calendar year 2017" pending the finalisation of some second-tier approvals.

But the company slammed legal challenges by conservationists, which along with the need for state and federal consent, has seen the approvals process stretched to some six years.

"(The) conclusion of second tier approvals and resolution of politically-motivated legal challenges is the company's principal focus, prior to a final investment decision being made," an Adani spokesman said in a statement.

"Having previously sought to progress to the construction phase in 2015, Adani is keenly aware of the risks of proceeding on major works in advance of the conclusion of these matters."

The awarding of the leases came a month after state authorities gave the project environmental approval subject to some 140 conditions.

Conservationists have argued the mega-mine would threaten the heritage-listed Great Barrier Reef, the world's biggest coral reef ecosystem.

Adani faces two legal challenges - one from an indigenous group and another mounted by an environmental organisation.

The organisation, the Australian Conservation Foundation, slammed the decision and said its case in the Federal Court would be heard next month.

"By granting a licence for this massive coal mine the Palaszczuk government is bowing to the demands of big polluters, not listening to the needs of the people," the foundation's chief executive Kelly O'Shanassy said in a statement.

Researchers say the reef is currently experiencing the worst bleaching on record in its pristine north, with few corals escaping damage.

The biodiverse site is also threatened by climate change, which conservationists said causes the bleaching, as well as farming run-off, development and the coral-eating crown-of-thorns starfish.