Adani Mining CEO Lucas Dow said the company will now begin developing a smaller open cut mine comparable to many other Queensland coal mines and will ramp up production over time to 27.5 million tonnes per annum and create 1500 jobs.
The current project encompasses an investment of $2 billion, with annual production of 10 to 15Mtpa of thermal coal.
This is smaller than the original project proposed in 2010, which was expected to export 60Mtpa and require investment of $16.5 billion.
Adani will also be reverting to a narrow gauge rail link to the port at Abbot Point, after the Queensland government indicated that it would veto a mooted $900 million loan to the company by the North Australia Infrastructure Facility.
"Our work in recent months has culminated in Adani Group's approval of the revised project plan that de-risks the initial stage of the Carmichael mine and rail project by adopting a narrow gauge rail solution combined with a reduced ramp up volume for the mine," Dow said.
"This means we've minimized our execution risk and initial capital outlay. The sharpening of the mine plan has kept operating costs to a minimum and ensures the project remains within the first quartile of the global cost curve."
All coal produced in the initial ramp up phase will be consumed by the Adani Group's captive requirements.
"The construction for the shorter narrow gauge rail line will also begin to match the production schedule," Dow said.
"We have already invested $3.3 billion in Adani's Australian businesses, which is a clear demonstration of our capacity to deliver a financing solution for the revised scope of the mine and rail project.
"The project stacks up both environmentally and financially.
"Today's announcement removes any doubt as to the project stacking up financially.
"We will now deliver the jobs and business opportunities we have promised for North Queensland and Central Queensland, all without requiring a cent of Australian taxpayer dollars."
The Carmichael project will deliver more than 1,500 direct jobs on the mine and rail projects during the initial ramp-up and construction phase, and will support thousands more indirect jobs, all of which will benefit regional Queensland communities, Dow said.
Federal resources Minister Matt Canavan tweeted it was great news that Adani had announced it plans to start work before Christmas.
Canavan congratulated Adani for "its focus and commitment to the project in the face of longstanding, ill-informed protest activity and an indecisive state Labor government."
"Adani's ability to re-scope and finance its Carmichael mine and rail project proves it is a viable, job-creating concern which stands on its own two feet financially and environmentally," he said.
The Queensland Resources Council CEO Ian Macfarlane said the investment in the project was a sign of the strength of the Queensland resources sector.
"This is great news for Queensland and great news for regional Queensland in particular, because every new resources project benefits all of us,"
"Adani has shown it is committed for the long-term for an investment that will create jobs now and decades into the future.
"In recent months Adani has made sensible revisions to the project to ensure it can get underway as soon as possible, including a scale up to capacity and a decision to use common narrow gauge infrastructure.
"Today's announcement will be an economic kickstart for all of Central and North Queensland, in particular for Rockhampton and Townsville where most of the jobs will be created. But there are also benefits for communities around Mackay, Bowen, Moranbah, Clermont and the Isaac and Central Highlands regions."
Galilee Basin project pipeline
Macfarlane said there are six mines that could proceed in the Galilee, which would create a new wave of prosperity to build on the enormous investments that have transformed our state for the better over the last 25 years.
"Each new project adds to the return for Queenslanders, by building schools, roads and hospitals and adding to the $4.3 billion in royalty taxes the resources sector pays to Queensland," he said.
The Resource Industry Network general manager Adrienne Rourke said the creation of a new mine brought confidence to the sector and best positioned the region to provide construction and maintenance services.
"This project will deliver 1500 direct jobs, as well as a further 6750 indirect jobs, during its construction phase. This means even more jobs for our region and continued economic growth, as well as more confidence for people looking to move to the region for work opportunities because of the longevity in the sector," she said.
"It is important to remember that we require continuous support when it comes to developing the Galilee Basin, to ensure the confidence in the market about the future of the METS sector.
"RIN calls upon all levels of government to discuss and support the efforts being made to attract people to our region to fill the numerous roles that are available now and into the future.
"But today is exciting news and we look forward to working with the Adani Mining team to ensure the businesses in our region are best placed when it comes to securing work. We boast a world-class engineering and heavy industrial sector that is innovative and safety-conscious, and ready to deliver solutions to this important project."
Minerals Council of Australia CEO Tania Constable said the Adani decision would provide a welcome boost for regional communities, jobs and the Australian mining industry.
"The mine will also open up the North Galilee Basin for further development - an exciting new phase in Australia's rich history of mining exploration and development which has made our nation a global mining powerhouse," she said.
"With routine state and federal environmental management plans set to be finalised shortly, work can get underway to build and develop the mine so benefits can flow to local businesses and the community."
Queensland Greens Senator Larissa Waters linked the approval of new coal mining projects like Adani to the current bushfires sweeping through Central Queensland.
"Queensland is burning right now," she tweeted.
"This is the new normal - and climate change means these extreme weather events will get even worse! Yet LNP and Labor keep backing new coal and are in complete denial about its impact. They are complicit in this devastation."
According to IBISWorld, Adani's decision to go ahead with the descaled plans is risky, as the demand for coal around the globe is decreasing and its homeport of India is rapidly transitioning towards renewable energy sources.
IBISWorld Senior Industry Analyst Jason Aravanis believes that the project is still a high-risk investment for the corporation.
"The investment decision for the Carmichael project is surprising, given the gloomy outlook for global coal demand. Adani's power stations in India alone generated losses in 2018 due to their reliance on expensive imported coal," he said.