Adani Enterprises is forging ahead with ambitious plans to build Australia's biggest coal mine in the next three years, despite a collapse in coal prices to a five-and-a-half year low, in a bid to supply coal to its power plants in India.
Australia's federal and Queensland state governments are eager to see the mining project move ahead, and Queensland has said Adani may make an announcement tied to the project during Indian Prime Minister Narendra Modi's visit to Australia next week.
The benchmark Newcastle price for thermal coal is just $62.66 a tonne, down 27 per cent this year.
The Carmichael mine in the untapped Galilee Basin has been on hold since Adani bought it in 2010, as the project got locked in a long- drawn approvals process over environmental concerns, as well as the funding process.
Adani said last month it planned to start construction work early next year, aiming for the first production from a 60-million-tonnes-a-year mine in 2017. At peak production it would boost Australia's thermal coal output by nearly 25 per cent.
But to start work in the next six months, Adani would need to bring in a partner or pour in its own money, since it has yet to line up project debt at a time when a third of Australia's coal output is loss-making.
Saddled with about $13 billion in net debt, it would need to raise around $1 billion through a share sale, a sale of a stake in the Abbot Point port or both.
Adani, which has appointed Morgan Stanley to advise on selling a stake in Abbot Point, said in an emailed statement that work was "progressing well to meet the project's 2017 first coal guidance."
It would not comment on any plans surrounding the visit by Modi, who is reputedly close to Adani's billionaire founder Gautam Adani.
Adani is also facing anti-coal campaigners who are fighting in courts to stop the mine and pressing banks not to lend for the port expansion, arguing that dredging and exports could harm the World Heritage-listed Great Barrier Reef.
In a counter-attack, Adani has launched advertisements on Australian television on the economic benefits of the project.
It is counting on lining up funding from South Korea, having named Posco Engineering & Construction as its preferred contractor to build the 388 km (241 mile) rail line.