Downer wins $680M Carmichael contracts

DESPITE a wave of protests and the recent suspension of engineering firms on Adani’s Carmichael coal project in Queensland, the miner has given Downer EDI two letters of awards for mining services contracts worth $680 million.
Downer wins $680M Carmichael contracts Downer wins $680M Carmichael contracts Downer wins $680M Carmichael contracts Downer wins $680M Carmichael contracts Downer wins $680M Carmichael contracts

Downer EDI has received two letters of awards for work on Adani’s Carmichael coal project in Queensland.

Marion Lopez

Downer was selected as the preferred mining services and infrastructure provider on the project in December last year.

The first contract award involves a $420 million engineering, procurement and construction project for the mine’s coal handling and preparation plant (CHPP). Downer will deliver this work in a joint venture with Korean firm POSCO Engineering, which was suspended from the project last month.

POSCO was the EPC contractor on the project’s terminal component at Abbot Point. Adani said it suspended activities due to delays in state government approvals.

The second contract awarded to Downer is worth $260 million and is for the operations and maintenance of the CHPP over an initial five year-term, with two additional one year options. 

Both letters of awards are subject to the parties executing binding contracts by September 30. 

Condition precedents in the contracts are expected to include Adani obtaining all necessary statutory approvals and project finance to develop the proposed mine.

Six contractors have already been suspended from the project in the last two months because of approvals delay.

They include POSCO, Parsons Brinckerhoff, WorleyParsons, Aecon, Aurecon and SMEC.

The Carmichael project has been the subject of national protests and a demonstration against it took place in Brisbane last month.

Protesters include reef coast locals, traditional owners from the Abbot Point area and Greenpeace activists.

They claim the coal proposals would harm the Great Barrier Reef and the global climate.

The project is also burdened with a legal challenge by the Mackay Conservation Group over the credibility of the federal environmental impact assessment.

If built, the  Carmichael project would be Australia’s largest open-pit coal mine, with six open pits and five underground mines producing up to 60 million tonnes of coal per annum over 60 years, and supporting the expansion of the Abbot Point port into one of the world’s largest coal terminals.

Surface operations are scheduled for 2016.

Adani maintains the project will create 10,000 jobs and deliver $22 billion in royalties and taxes.