Adani gets Queensland nod for mine-rail project

Adani Mining has finally obtained approval from the Queensland state government in Australia to build a rail line for its $15 billion Carmichael coal project, bringing it a step closer towards making a final decision on whether to go ahead with the massive scheme.

The Australian state of Queensland approved the A$2.2 billion (US$2 billion) North Galilee Basin Rail project, a 300km railway to connect the Carmichael mine and potentially other mines in the untapped Galilee Basin to the east coast port of Abbot Point.

While Queensland's coordinator-general has given the go-ahead to the Indian company's rail line, called the North Galilee Rail Project, it still requires federal government approval, which is due by 30 September.

The rail line will transport more than 100 million tonnes of coal a year.

Deputy premier Jeff Seeney says the project, which will create up to 2400 jobs during construction, will unlock the vast, resource-rich Galilee Basin.

"The multi-billion dollar coal projects proposed for the Galilee Basin have the potential to create the next wave of resource sector jobs in Queensland and dramatically boost our state's coal exports," he said in a statement.

Seeney said Adani's project was subject to strict conditions to protect flora and fauna and address surface water, air quality and noise emissions.

He also said the Indian firm must strike a deal with affected landholders that stipulates how access will be maintained to homesteads, stock feeding areas and water supply.

Despite analysts' views that Adani's project would be unprofitable at current coal prices, the company said in a statement that it remained committed to pushing ahead with it to supply coal to power stations in India.

"Adani looks forward to continuing to work with our project partners and all levels of government to see this through," Adani Mining, the Australian arm of Adani Enterprises, said.

Adani recently signed an agreement with Posco Engineering & Construction Co Ltd to build the rail line. Costs and other details of the contract are due to be set by the end of this year.

The company has yet to line up funding for the Carmichael mine, as a deep slump in coal prices has scared off lenders.

It also continues to face challenges from green groups worried about carbon emissions from burning coal and damage to the Great Barrier Reef from port expansions and coal shipping.