Adani has cancelled all contracts awarded to Downer for works on its Carmichael Coal Mine after the Queensland Government vetoed a taxpayer-funded loan.
Adani has flagged that it will now build and operate the mine itself in an attempt to minimise costs.
“Following on from the NAIF veto last week, and in line with its vision to achieve the lowest quartile cost of production by ensuring flexibility and efficiencies in the supply chain, Adani has decided to develop and operate the mine on an owner operator basis,’’ Adani said in a statement.
Adani originally intended to outsource development and operation of the Carmichael mine and signed a conditional $2.6 billion with Downer to provide these services. However, today Adani and Downer have mutually agreed to cancel this contract.
“Adani and Downer have mutually agreed to cancel all Letter of Awards and Downer will provide transitional assistance until March 31, 2018,’’ the company said.
“Adani remains committed to develop the Carmichael project and will ensure the highest level of standards and governance.
“This will not affect our commitment or the number of local jobs across Queensland. This is simply a change in management structure and ensures that the mine will ultimately be run out of our Adani Australia offices in Townsville.
“Adani Australia currently employs over 800 people and has invested over $3.3B in Queensland, which is the biggest investments by an Indian company in Australia.’’
It was a campaign promise of Queensland's Labor Government to veto the loan, a move they took once they had secured power after the election.
Adani is still seeking funding for the mine. Earlier in December, Chinese lenders declined to provide finance to Adani for the Carmichael coal mine. All four major Australian banks have ruled out funding the mine.
This decision has ended three years of negotiations between Adani and Downer