Adani has scrapped a $2bn agreement to outsource the operation of its controversial Queensland coalmine after the state government killed off a taxpayer-funded loan.
The Indian miner says it will now develop and operate the Carmichael project on an owner-operator basis after reaching an agreement with contractor Downer EDI to abandon their deal, which was reportedly worth about $2bn.
Adani said the decision was about lowering production costs and was made after the Palaszczuk government blocked a $1bn loan to the Indian miner from the federal Northern Australia Infrastructure Facility.
“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,” the miner said in a statement on Monday.
It said Downer had agreed to end its involvement, but would provide transitional assistance until the end of March.
“Adani remains committed to develop the Carmichael project and will ensure the highest level of standards and governance,” the statement said.
“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.”