NewsClick

NewsClick
  • हिन्दी
  • Politics
  • Economy
  • Covid-19
  • Science
  • Culture
  • India
  • International
  • Sports
  • Articles
  • Videos
search
menu

INTERACTIVE ELECTION MAPS

image/svg+xml
  • All Articles
  • Newsclick Articles
  • All Videos
  • Newsclick Videos
  • हिन्दी
  • Politics
  • Economy
  • Science
  • Culture
  • India
  • Sports
  • International
  • Africa
  • Latin America
  • Palestine
  • Nepal
  • Pakistan
  • Sri Lanka
  • US
  • West Asia
About us
Subscribe
Follow us Facebook - Newsclick Twitter - Newsclick RSS - Newsclick
close menu
×
For latest updates on nCOVID-19 around the world visit our INTERACTIVE COVID MAP
Politics
India

Financial Viability of Adani’s Carmichael Project in Question as Insurance Companies Back out

Reportedly, Adani’s coal mining and rail project in Australia has made a $279 million loss during the 2019-20 financial year, increasing its cumulative losses since inception to $794 million.
Prudhviraj Rupavath
17 Jun 2020
Financial Viability of Adani’s Carmichael Project

Financial viability of Adani Enterprises Ltd’s contentious Carmichael coal mine project in Australia has come under scanner as three of its current insurers have now publicly said they will not provide insurance for the project and another insurer that covered the construction of the project said it is “reviewing” it. The insurers’ move comes at a time when Adani has awarded contracts to Australia-based companies, which have begun construction of the rail network of the project.

Last week, leaked invoices obtained by The Sydney Morning Herald and The Age revealed that four global insurance companies, Liberty, HDI, AXL, and Aspen Reinsurance, were paid for underwriting works on Adani's Carmichael coal mine and rail project. While Aspen Reinsurance said it would review corporate policies over projects that contribute to climate change, the other three have now publicly said that they will not provide insurance to the controversial project after their current residual policies come to an end.

Backlash from these insurance companies is not the first for Adani’s Carmichael project as over 15 insurance companies had earlier ruled themselves out of providing coverage to the project.

The project has been mired in controversies since its inception as regulatory and environmental concerns gripped Adani’s attempts to begin construction work ever since it acquired the mines back in 2010.

Last year, Adani won final approval from Australian authorities to produce 60 million tonnes of thermal coal annually from the Carmichael mine. The Queensland government approved the project after Adani produced over a dozen versions of the plan that promised hundreds of jobs to the people of the region.

So far, Adani has awarded contracts worth A$ 1 billion including its recent deal worth of A$ 300 million contract to Queensland-based BMD to deliver civil construction works for the Carmichael rail network.

Responding to the setbacks from insurers, in an emailed statement to Bloomberg, Adani Spokesperson said: “[D]etails on insurance providers for the Carmichael Project are commercial in confidence, however we have the requisite insurance requirements in place.”

Notably, this has been a common response from Adani Group during the previous denials from insurance companies to the project. All major projects require underwriting insurance, for equipment damage and workers’ compensation, among other things.

If global insurers take up the policy of distancing from projects related to fossil fuels, Adani will be left with no option other than to self-insure the project further burdening its financial viability.

Adani Group has earlier pledged that it will self fund its Australian project as over years at least 40 major banks have refused to fund the project which environmentalists have warned would accelerate climate change.

Reportedly, the project has made a $279 million loss during the 2019-20 financial year, increasing its cumulative losses since inception to $794 million.

Experts opine that Adani Group has to shuffle funds among its green businesses to fund the Charmichael project. “Adani Power has zero financial capacity to borrow more money. Global investors have no problem investing in one of the biggest port players in Asia so he [chairman Gautam Adani] just has to redirect the money back to Carmichael,” said Tim Buckley, senior energy economist at the Institute for Energy Economics and Financial Analysis while speaking to The Sydney Morning Herald.

The thermal coal produced at the Charmichael mine is expected to be exported to Adani Power’s coal-fired generators in India and other power generators in Asia.

In 2010, Adani acquired Carmichael mine by investing over $3 billion from the Queensland government, but the project faced stiff resistance from numerous corners including the country’s native people, environmentalists and political parties. ‘Stop Adani’ protests led by environmentalists, and citizens swept across Australia that raised climate change concerns, rights of native people and the ecosystem in Galilee Basin, where the mine is located.

Also read: Healthcare System on the Verge of Collapse in Chile

Get the latest reports & analysis with people's perspective on Protests, movements & deep analytical videos, discussions of the current affairs in your Telegram app. Subscribe to NewsClick's Telegram channel & get Real-Time updates on stories, as they get published on our website.
Adani
Carmichael mine
Insurance companies
climate change
Queensland
Adani Enterprises Ltd
Related Stories
ENV

CSE’s State of Environment Report: Inching Closer to Ecological Disasters

Chamoli Disaster: SC Appointed Expert Says Char Dham Project May Cause Further Catastrophes

Chamoli Disaster: SC Appointed Expert Says Char Dham Project May Cause Further Catastrophes

minera resource.

Is Modi Government Planning on Selling State Govt. Owned Mineral Resources to Corporates?

Chamoli

Chamoli Disaster: Death Toll Rises to 58, 148 Persons Still Missing

Disha Ravi

Disha Ravi’s Arrest Speaks Poorly of Modi’s New India

NITI Aayog Studying How Judges Can Help Economics Beat Environmental Concerns

NITI Aayog Studying How Judges Can Help Economics Beat Environmental Concerns

UK

Experts Flag Environmental Concerns Behind Uttarakhand Disaster

Explainer: Glacial Burst of Uttarakhand That Caused Massive Flood

Explainer: Glacial Burst of Uttarakhand That Caused Massive Flood

Coal mining.

Modi Govt Easing Business in Coal Mining and Thermal Power, Ignoring Ecological Concerns

Biden Signs Executive Order Rejoining Paris Climate Agreement, to Come Into Effect February 19

Biden Signs Executive Order Rejoining Paris Climate Agreement, to Come Into Effect February 19

Share on FacebookShare on TwitterShare on WhatsAppShare via EmailShare on RedditShare on KindlePrint
Share
Share on FacebookShare on TwitterShare on WhatsAppShare via EmailShare on RedditShare on KindlePrint
Share

Related Stories

PTI

IMD: Above Normal Summer Temperatures Likely across Country Except South, Central India

02 March 2021
New Delhi, March 1: Day temperatures are likely to be above normal in the north, north-east, parts of east and west India, the India Me
Robin Scher

Pandemic May Have Left Over 250 Million People With Acute Food Shortages

28 February 2021
Beyond the questions surrounding the availability, effectiveness and safety o
Ayaskant Das

Uttarakhand Flash Floods: Another Disaster Waiting to Happen?

28 February 2021
New Delhi: The human and environmental tragedy that unfolded in Uttarakhand during flash fl

Pagination

  • Next page ››

More

  • Khichdi

    UP: Minor Girl Dies Allegedly After Consuming 'Khichdi' In Mid-Day Meal in Ballia

  • covaxine

    COVID-19: Interim Results of COVAXIN’s Phase III Trials out, Claims 81% Efficacy

  • Zalmay Khalilzad. Photo : Wikimedia Commons

    20 Years After Invasion, US Proposes a New Afghan Government That Includes Taliban

  • War crimes in Palestine

    International Criminal Court Announces Investigation into War Crimes in Palestine

  • Load More
Subscribe
connect with
about