Melbourne: Indian mining giant Adani Group has suspended two major contractors on its 16.5 billion dollar coal and mine project in Australia, triggering fresh speculation about the company's ability to finance the country's largest coal mine, a media report said today.
"Adani has suspended two major contractors on its Queensland coal project, raising fresh speculation about the company's ability to finance Australia's largest coal mine," the Sydney Morning Herald reported.
Project managers Parsons Brinckerhoff and South Korean construction company Posco were told late last week to stop work on the Carmichael mine, rail and port project in the Galilee Basin of Queensland, the report said.
Company sources said senior Adani executives flew to India at the weekend for talks about the project's future.
"It seems to me like they're at the crossroads of do they continue or do they do what GVK did and sack everyone," one source was quoted as saying by the newspaper.
"I think they just don't have the money and can't get the money to go ahead. I think, one, Adani don't have the money, and two, they are realising this is a long, drawn-out process," the source added.
Responding to the latest report, an Adani spokesperson said, "Suggestions in a media report of a fresh decision in relation to project management and execution contracts are simply not true".
"As indicated when asked, the current changes are connected to the same engineering contracts and preliminary works variations Adani announced last month. The preliminary works contracts were previously sustained due to the level of investment Adani had maintained for more than 12 months in anticipation of a range of government decisions and approvals timeframes," Adani said.
"As we announced on June 24, 2015, a number of changes in the approvals processes meant these timeframes had to be adjusted," the company clarified.
Tim Buckley from the Institute for Energy Economics and Financial Analysis (IEEFA) said "As evidenced by 11 major financial institutions which have already ruled out funding, no investor intent on securing any kind of return is giving it a second glance".
Buckley said IEEFA remains of the view that the Galilee Basin is a stranded asset in light of the structural market changes away from coal towards lower emission alternatives in key coal import markets of India, China, Europe and South Korea.