DNA Money Edit: Cloud over Adani's Oz project

After battling a barrage of environmental protests and legal and regulatory hurdles for seven years, Adani Group is facing another round of troubles in setting up the proposed Carmichael coal and rail project in Australia's central Queensland. Long after both the Australia government and Queensland government threw their weight behind the $16.5 billion coal project, the US-based Institute for Energy Economics and Financial Analysis (IEEFA) has now raised hackles that the Abbot Point Coal Terminal faces the risk of becoming a stranded asset if its proposed Carmichael mine fails to get the AUD 1 billion 'subsidy'. Of course, the project is banking on the Queensland government giving the company a concessional loan to help it build the rail link.

Over the past few years, Adani Group faced severe opposition from green activists who claimed the coal project would result in higher pollution levels and damage the Great Barrier Reef marine park in northern Queensland. Currently operating at just over 50% capacity, the coal terminal needs the Carmichael mine to beef up its productivity. Meanwhile, Adani Power's financially-distressed power plant at Mundra in Gujarat, the main customer of Australian coal, is bleeding on account of higher input cost due to expensive imported coal.