Adani changes to narrow gauge

 
  Sulla1 Chief Commissioner

Adani has announced today it will no longer build a new 388km standard gauge route to the Carmichael Mine, instead, it will build a 200km narrow gauge extension from Aurizon's existing Newlands System to reduce construction costs and construction timetables.

https://issuu.com/adaniaustralia/docs/130918_-_factsheet_and_release_-_fo

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  SinickleBird Assistant Commissioner

Location: Qantas Club at Mudgee International Airport
Problems solved. Simples!
  james.au Chief Commissioner

Location: Sydney, NSW
Not surprising and makes sense.

Though, mine isnt in progress yet so still a long way to go before we see trains.
  Dangersdan707 Chief Commissioner

Location: On a Thing with Internet
Not surprising and makes sense.

Though, mine isnt in progress yet so still a long way to go before we see trains.
james.au
If it goes ahead at all
  Rossco T Chief Train Controller

Location: Camberwell, Victoria
Not surprising and makes sense.

Though, mine isnt in progress yet so still a long way to go before we see trains.
If it goes ahead at all
Dangersdan707
What I don't understand is why they had proposed an isolated standard gauge railway in the first place.

Doesn't it make sense to utilise existing infrastructure?  Or did they think there would be that many trains that it was worth having their own tracks without having to pay access fees to use the Aurizon network?

Ross
  Sulla1 Chief Commissioner

Not surprising and makes sense.

Though, mine isnt in progress yet so still a long way to go before we see trains.
If it goes ahead at all
What I don't understand is why they had proposed an isolated standard gauge railway in the first place.

Doesn't it make sense to utilise existing infrastructure?  Or did they think there would be that many trains that it was worth having their own tracks without having to pay access fees to use the Aurizon network?

Ross
Rossco T

Adani likes vertical integration operations and tries to keep it's mining, transport, ports and power generation in-house - which is where the stand-alone standard gauge line fits in. I suspect the company is now more interested in getting the coal out of the ground and making money rather than bleeding any more cash on this project.

Aurizon's Newlands System will also need capacity upgrades to carry Adani's traffic, this will almost certainly include double tracking several sections and extending RCS (CTC signalling) south from Collinsville to Newlands. Tonnages north of Collinsville could exceed 80-million tonnes if existing tonnages and Adani traffic are combined.  I can't say it's clear who will be paying for those upgrades, but I assume some sort of agreement has been made prior to this announcement.
  james.au Chief Commissioner

Location: Sydney, NSW
Adani likes vertical integration operations and tries to keep it's mining, transport, ports and power generation in-house - which is where the stand-alone standard gauge line fits in. I suspect the company is now more interested in getting the coal out of the ground and making money rather than bleeding any more cash on this project.
Sulla1
In mining speak they are derisking the project.  By reducing capital cost they are reducing the amount of debt they'll need to carry.  And given lots of lenders have ruled themselves out the cost of debt is probably not as cheap for them.  I wouldnt be surprised if there are other changes to capital expenditures along the way.

Which isnt necessarily a bad thing - conservation of all resources etc.  But Canavan/Christiensen et al wont like it as its less $$ spent in the north...
  YM-Mundrabilla Minister for Railways

Location: Mundrabilla but I'd rather be in Narvik
' In mining speak they are derisking the project.  By reducing capital cost they are reducing the amount of debt they'll need to carry.  And given lots of lenders have ruled themselves out the cost of debt is probably not as cheap for them.'

Is this the same as getting some other silly 'so and so' (government/taxpayer) to fork out and carry half the cost?

Privatisation is a wonderful thing especially when one can get a government to pitch in when the privateers are too smart to do so?
  james.au Chief Commissioner

Location: Sydney, NSW
' In mining speak they are derisking the project.  By reducing capital cost they are reducing the amount of debt they'll need to carry.  And given lots of lenders have ruled themselves out the cost of debt is probably not as cheap for them.'

Is this the same as getting some other silly 'so and so' (government/taxpayer) to fork out and carry half the cost?

Privatisation is a wonderful thing especially when one can get a government to pitch in when the privateers are too smart to do so?
YM-Mundrabilla
No its about reducing the amount of money they need to spend and therefore borrow.  This change in approach doesnt look to involve government.

Another view, Adani had gold plated the solution with their own rail line.  Theyre taking off some of the gold and being a bit more rational about (at least) that element.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
' In mining speak they are derisking the project.  By reducing capital cost they are reducing the amount of debt they'll need to carry.  And given lots of lenders have ruled themselves out the cost of debt is probably not as cheap for them.'

Is this the same as getting some other silly 'so and so' (government/taxpayer) to fork out and carry half the cost?

Privatisation is a wonderful thing especially when one can get a government to pitch in when the privateers are too smart to do so?
No its about reducing the amount of money they need to spend and therefore borrow.  This change in approach doesnt look to involve government.

Another view, Adani had gold plated the solution with their own rail line.  Theyre taking off some of the gold and being a bit more rational about (at least) that element.
james.au
I agree on both counts.

Think of this way, Project Concept floated on limited costings, CEO does the rounds with fancy Power Point Presentations, fancy Gold Plated Project to deliver returns ahead of the industry benchmark, lots of jargon and big words. Big Indian companies are very much used to building everything and being very vertically integrated as only way to get what you need, reliably and control costs.

Meanwhile in back offices, the Project team are doing the FEED study and "oh-poo" alarms starting going off on costs. Feedback from the top is to maintain the projects viability and focus cuts on the supporting systems. So the outsourcing commences, lease this, contract that out, etc. In Project speak, everything is VIP'ed or Value Improvement Process (yes I have picked up the pieces on a few). Site roads get less bitumen, offices buildings go open plan and use construction buildings, curve and gutters are removed, Landcruisers become Hilux's, Train tracks get narrower, the obvious initial options of using existing infrastructure and realisation Australia is not India comes home.
  Sulla1 Chief Commissioner

More details, including selling a stake in Abbott Point to Korean interests to finance the new line. Construction now expected by Christmas (which ever one that will be).

https://www.townsvillebulletin.com.au/news/queensland/adani-to-fasttrack-queensland-mine-project/news-story/b9204ad682f7fe5256cbcf8d26d0e4a6
  bevans Site Admin

Location: Melbourne, Australia

Adani likes vertical integration operations and tries to keep it's mining, transport, ports and power generation in-house - which is where the stand-alone standard gauge line fits in. I suspect the company is now more interested in getting the coal out of the ground and making money rather than bleeding any more cash on this project.

Aurizon's Newlands System will also need capacity upgrades to carry Adani's traffic, this will almost certainly include double tracking several sections and extending RCS (CTC signalling) south from Collinsville to Newlands. Tonnages north of Collinsville could exceed 80-million tonnes if existing tonnages and Adani traffic are combined.  I can't say it's clear who will be paying for those upgrades, but I assume some sort of agreement has been made prior to this announcement.
Sulla1

Are we talking about electrification?
  BrentonGolding Chief Commissioner

Location: Maldon Junction
More details, including selling a stake in Abbott Point to Korean interests to finance the new line. Construction now expected by Christmas (which ever one that will be).

https://www.townsvillebulletin.com.au/news/queensland/adani-to-fasttrack-queensland-mine-project/news-story/b9204ad682f7fe5256cbcf8d26d0e4a6
Sulla1
Interesting develpment Sulla, the article is paywalled so I can't see it but this ties in with the notion that Adani is having trouble getting the finance it needs to develop the project. Most if not all major banks in Aus have bowed to customer pressure and refused to be involved and so it may be a case of trying to make do.

BTW I find the whole social media pile on around Adani rather bemusing considering the massive tonnages of coal that are currently exported from Aus, just take a look at the figures in the ARTC annual report, they are staggering.

BG
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
More details, including selling a stake in Abbott Point to Korean interests to finance the new line. Construction now expected by Christmas (which ever one that will be).

https://www.townsvillebulletin.com.au/news/queensland/adani-to-fasttrack-queensland-mine-project/news-story/b9204ad682f7fe5256cbcf8d26d0e4a6
Interesting develpment Sulla, the article is paywalled so I can't see it but this ties in with the notion that Adani is having trouble getting the finance it needs to develop the project. Most if not all major banks in Aus have bowed to customer pressure and refused to be involved and so it may be a case of trying to make do.

BTW I find the whole social media pile on around Adani rather bemusing considering the massive tonnages of coal that are currently exported from Aus, just take a look at the figures in the ARTC annual report, they are staggering.

BG
BrentonGolding
We export 500mtpa of coal or something like that. A company wants to open another one and all of a sudden the world's ecosystem will collapse.

The interesting thing is the attack on all aspects of Aldani and its owners as a desperate pathetic means to find a way to stop it. Meanwhile RTA or other would open one and it wouldn't even make the news in Brisbane.
  YM-Mundrabilla Minister for Railways

Location: Mundrabilla but I'd rather be in Narvik
It is not possible, of course, that the banks and other financiers see Adani as an unacceptable risk for any number of reasons.

How long before some mug government stumps up a train load of cash 'to help them out'?
  Sulla1 Chief Commissioner


Adani likes vertical integration operations and tries to keep it's mining, transport, ports and power generation in-house - which is where the stand-alone standard gauge line fits in. I suspect the company is now more interested in getting the coal out of the ground and making money rather than bleeding any more cash on this project.

Aurizon's Newlands System will also need capacity upgrades to carry Adani's traffic, this will almost certainly include double tracking several sections and extending RCS (CTC signalling) south from Collinsville to Newlands. Tonnages north of Collinsville could exceed 80-million tonnes if existing tonnages and Adani traffic are combined.  I can't say it's clear who will be paying for those upgrades, but I assume some sort of agreement has been made prior to this announcement.
Are we talking about electrification?
bevans

Electrification at those tonnages has definitely been studied, and the Newlands System could end up hauling more coal the electrified Blackwater System. Aurizon may consider it, but at this stage I would say Adani won't want the extra costs of electrification on its line and it or an operator will choose larger 4000-4600hp diesel models like the Progress/EMD GT46CU-ACe or the GE ES40ACi instead.
  Sulla1 Chief Commissioner

More details, including selling a stake in Abbott Point to Korean interests to finance the new line. Construction now expected by Christmas (which ever one that will be).

https://www.townsvillebulletin.com.au/news/queensland/adani-to-fasttrack-queensland-mine-project/news-story/b9204ad682f7fe5256cbcf8d26d0e4a6
Interesting develpment Sulla, the article is paywalled so I can't see it but this ties in with the notion that Adani is having trouble getting the finance it needs to develop the project. Most if not all major banks in Aus have bowed to customer pressure and refused to be involved and so it may be a case of trying to make do.

BTW I find the whole social media pile on around Adani rather bemusing considering the massive tonnages of coal that are currently exported from Aus, just take a look at the figures in the ARTC annual report, they are staggering.

BG
We export 500mtpa of coal or something like that. A company wants to open another one and all of a sudden the world's ecosystem will collapse.

The interesting thing is the attack on all aspects of Aldani and its owners as a desperate pathetic means to find a way to stop it. Meanwhile RTA or other would open one and it wouldn't even make the news in Brisbane.
RTT_Rules

QCoal's 10-million tonne Byerwen mine opened at the beginning of the year without even a blip in the news cycle, and the company has added 12-million tonnes of mining capacity to the Collinsville region in just 10-years. No protests, no chest pounding from Brisbane, just happiness at the royalties. Meanwhile, south of the Carmichael mine, we have Hancock's Alpha and Warratah's North Alpha mines, with combined outputs of 70-million tonnes per annum, proceeding to development stage without even a squeak from the anti-coal lobby. Adani has been directly targetted and possibly ruined by 55 individual court cases to block developement while Australian developers have been left virtually unnoticed.
  james.au Chief Commissioner

Location: Sydney, NSW
BTW I find the whole social media pile on around Adani rather bemusing considering the massive tonnages of coal that are currently exported from Aus, just take a look at the figures in the ARTC annual report, they are staggering.

BG
We export 500mtpa of coal or something like that. A company wants to open another one and all of a sudden the world's ecosystem will collapse.

The interesting thing is the attack on all aspects of Aldani and its owners as a desperate pathetic means to find a way to stop it. Meanwhile RTA or other would open one and it wouldn't even make the news in Brisbane.
RTT_Rules
Whilst there is the environmental issue that has many on the left and centre/left activated, i am one of the ones concerned that this company has seemingly been on the hunt for handouts from all sorts of desperate government agents (Mayors, MPs, Senators etc).  If RTA was going to set up another mine it would go and do it itself.  Yes there might be some government programs involved but these would be open to all others.  Adani looks to be asking for special treatment from an area that feels it is neglected and deserving (whether it is or not is another question), which is the more egregious problem in my view.
  Sunbird Station Master

The switch from an all new standard gauge line to an extension of the existing narrow gauge network is a sensible cost reducing measure and I'm surprised it took so long.
The various anti coal groups have been claiming for ages that the mine doesn't stack up economically and I kind of agreed with them. Not in the same way though. While they believe that new coal mines don't make any sense at all I thought the initial proposal was so outlandishly expensive I couldn't see how they would get a return on investment at the average price of thermal coal.
By moving to a more realistic development plan the banks may come on board and we might finally see some real progress.
  The Vinelander Minister for Railways

Location: Ballan, Victoria on the Ballarat RFR Line
Adani likes vertical integration operations and tries to keep it's mining, transport, ports and power generation in-house - which is where the stand-alone standard gauge line fits in. I suspect the company is now more interested in getting the coal out of the ground and making money rather than bleeding any more cash on this project.
In mining speak they are derisking the project.  By reducing capital cost they are reducing the amount of debt they'll need to carry.  And given lots of lenders have ruled themselves out the cost of debt is probably not as cheap for them.  I wouldnt be surprised if there are other changes to capital expenditures along the way.

Which isnt necessarily a bad thing - conservation of all resources etc.  But Canavan/Christiensen et al wont like it as its less $$ spent in the north...
james.au

Adani is dead anyway and with the inevitable election loss led by the used car salesman ScoMo... Christenen and Canavan...two of the several dinosaurs in the Coalition will go out as well in the election rout...The fed Libs are so fraught with infighting they simply cannot create a veneer of stability to continue in government...then there's the Wentworth by-election next month which may speed things up even faster.

Mike.
  ParkesHub Chief Commissioner

Adani is dead anyway and with the inevitable election loss led by the used car salesman ScoMo... Christenen and Canavan...two of the several dinosaurs in the Coalition will go out as well in the election rout...The fed Libs are so fraught with infighting they simply cannot create a veneer of stability to continue in government...then there's the Wentworth by-election next month which may speed things up even faster.

Mike.
The Vinelander
Yes, I think getting finance for this black elephant is remote especially after the Chinese pulled out.

Seeing Slo-Mo in the Reps with a lump of coal said it all for me.
  Big J Deputy Commissioner

Location: In Paradise
I love everyone's focus on Adani.

It is almost like that they are the only prospect for the Galilee Basin. It almost like that GVK H is operating in stealth.

My view is that the public purse shouldn't be spent on them, however if the business case stacks up for them, why not?

Do we want the recipients of the coal to use coal with higher ash and sulphur content that is sourced from Indonesia, China and India? That would be a great environmental outcome wouldn't it?

The issue for me is, if these projects do get up and running what will the governments use the revenue on? Business as Usual? Or should they use the funds to work on the transformation of our own economy being dependent on fossil fuels and invest on the alternatives such as biofuels (algae not food crops), base load alternatives (geothermal, waste to energy) etc.

We should accept if the projects stack up lets use the revenue to help ourselves.

But sadly as usual the funds will be spent on the current economy as the politicians want to keep their positions. Short term outcomes is how we operate. Look what happened to the future fund.

This nation needs to become pragmatic, not idealistic. We are going to wreck it for our kids.We need to sieze this opportunity as it will be the last coal development of any scale in Australia and we need to use the economic benefits for our future and not for others.
  james.au Chief Commissioner

Location: Sydney, NSW
Do we want the recipients of the coal to use coal with higher ash and sulphur content that is sourced from Indonesia, China and India? That would be a great environmental outcome wouldn't it?
Big J
The only issue with this argument is that it assumes that the coal from the dirtier mines will stay in the ground.  It wont - it will simply find another use somewhere else.  So the emissions will go up.
  Big J Deputy Commissioner

Location: In Paradise
Do we want the recipients of the coal to use coal with higher ash and sulphur content that is sourced from Indonesia, China and India? That would be a great environmental outcome wouldn't it?
The only issue with this argument is that it assumes that the coal from the dirtier mines will stay in the ground.  It wont - it will simply find another use somewhere else.  So the emissions will go up.
james.au
I agree.
  BrentonGolding Chief Commissioner

Location: Maldon Junction
Do we want the recipients of the coal to use coal with higher ash and sulphur content that is sourced from Indonesia, China and India? That would be a great environmental outcome wouldn't it?
The only issue with this argument is that it assumes that the coal from the dirtier mines will stay in the ground.  It wont - it will simply find another use somewhere else.  So the emissions will go up.
james.au
I'm not sure about that argument James. There is a finite demand for coal around the world per annum and ATM potential supply exceeds demand. This is why the customers are able to cherry pick the good stuff (which Australia has an abundance of) and leave the poorer quality stuff in the ground.

As the world continues to move towards renewebles that demand will begin to taper off - demand may upscale as India and China bring new demand to the market but at the same time demand from some traditional customers is falling so there will be a see-sawing of demand in the near term.

Eventually India and China's own demand will begin to drop as they bring renewables online as well, either under pressure from their own people or from the international community. China already investing heavily in renewables, leading the world if you believe the press reports, as it tries to counter it's massive air pollution problems.

BG

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