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India's Adani proceeds with $6.5bn Australian coal project

June.07 Coal

Indian billionaire Gautam Adani gave approval for an Australian coal mine project. © Reuters

MUMBAI -- Adani Enterprises gave final approval Tuesday for investment in the controversial $6.5 billion coal mine and rail project in Australia's central Queensland area, amid protests from environmentalists.

Shares in Adani Enterprises jumped nearly 6% on the Indian bourse following news of the project, which could serve Indian demand for coal.

"I am proud to announce the official start of one of the largest single infrastructure and job-creating developments in Australia's recent history," Adani Group Chairman Gautam Adani said in a statemen Tuesday.

Preparation for construction on the Carmichael project, where coal reserves are estimated at 11 billion tons, will begin in the September 2017 quarter, he said.

The Queensland project requires construction of a rail line and expansion of the port at Abbot Point, drawing strong opposition from environmental groups concerned that mining will further harm the already damaged Great Barrier Reef.

But the government has pitched the project as an investment opportunity. Queensland Premier Annastacia Palaszczuk officially opened Adani's regional headquarters in Townsville, which will serve as the center for the company to oversee construction and operations.

"We have been challenged by activists in the courts, in inner-city streets and even outside banks," Adani said. "We are still facing activists. But we are committed to this project. We are committed to regional Queensland, and we are committed to addressing energy poverty in India."

The Indian conglomerate has already invested $3.3 billion in the project, including buying the bulk coal handling port at Abbot Point, and has signed contracts for design, construction and operations, supply of material and professional services.

The project is expected to generate 10,000 direct and indirect jobs, according to Adani, but environmental groups have questioned that claim and call it an "exaggeration."

"This mine will be a disaster for the climate, the Great Barrier Reef and frontline communities in Queensland and around the world," Greenpeace spokesman Nikola Casule said, as quoted by the BBC.