Coal news and updates

Adani, GVK coal ventures in new doubts over Australia state poll, Reef

A shock state election result in Australia's coal-rich Queensland state and heightened pressure to protect the Great Barrier Reef have thrown new doubts over plans by Indian firms to build two huge mines.

Queensland saw a voter backlash against the conservative government's plan to sell A$37 billion ($29 billion) of assets to cut debt and fund coal infrastructure at the election. This included money for a rail line and port planned by India's Adani EnterprisesBSE 2.23 % for what would be Australia's biggest coal complex, in the Galilee Basin, a remote outback area.

In a policy reversal, the victorious Labor Party has ruled out asset sales or using taxpayer cash for a coal rail line or water pipe, and said it wouldn't allow dredge spoil to be dumped in wetlands near Adani's Abbot Point port, adding to costs.

"The prospects of public investment in the main part of the rail and port project have declined to zero," said John Quiggin, an economics professor at the University of Queensland.

Tim Buckley of the Institute for Energy Economics and Financial Analysis, which opposes new coal developments, estimated at least A$1 billion in subsidies had been taken off the table, though this is hard to independently verify as the government had never publicly said how much it was providing.

The Queensland Resources Council, an industry body, said the rail subsidy would have been about A$300 million.

A failure to launch the projects, already struggling to raise financing as coal prices languish, would hit plans to raise Australia's coal exports by 70 percent to more than 300 million tonnes this decade. It would, however, be a win for environmentalists worried about damage to areas such as the Great Barrier Reef off Queensland's coast and the impact on carbon emissions.

Source: Reuters