Adani Mining Partners with Posco for Rail Deal at Carmichael Mine
Adani Mining Pty has signed a binding agreement with POSCO E&C to develop its 388km railway for the Carmichael mine in Queensland’s Galilee Basin.
The company will give exclusive rights to POSCO E&C to be the engineering, procurement and construction contractor for the project. The deal is estimated to be worth $2.2 billion and will include construction of the railway from the Carmichael mine in the northern part of the Galilee to the already established rail lines in the Bowen Basin.
"This is the first major step towards finalizing the project's construction contracts ... The binding agreement will enable us to develop a cost efficient rail solution,” said Adani CEO Jeyakumar Janakaraj.
The rail infrastructure will be capable of transporting 60 million tons of coal per year.
According to Indian billionaire owner Gautam Adani, the project will provide Australia with ample job opportunity and economic benefit.
“The rail project will lead to the opening of the Carmichael mine project, which will deliver in excess of 10,000 jobs, and will also provide vital opportunities for Australian infrastructure development and contribute to energy security of India by lighting the lives of millions of Indians,” said Indian billionaire owner Gautam Adani.
In addition to building the project, POSCO will help fund the rail line by buying an equity stake in the Carmichael project.
The Carmichael mine is expected to produce 10 billion tons of coal and is considered by many to be the largest single coal tenement in the world. Production of the site is expected in 2017.
Construction of the rail line is expected next year with the company still waiting to gain final federal approval for its massive coal project.
Global iron ore production to recover by 5.1% in 2021
Global iron ore production fell by 3% to 2.2bnt in 2020. Global production is expected to grow at a compound annual growth rate (CAGR) of 3.7% to 2,663.4Mt between 2021 to 2025. The key contributors to this grow will be Brazil (6.2%), South Africa (4.1%), Australia (3.2%) and India (2.9%). Key upcoming projects expected to commence operations include South Flank in Australia (2021), Zulti in South Africa (H2 2021), Serrote Da Laje in Brazil (H2 2021) and Gudai-Darri (2022), according to GlobalData, a leading data and analytics company.
Vinneth Bajaj, Associate Project Manager at GlobalData, comments: “Declines from Brazil and India were major contributors to the reduced output in 2020. Combined production from these two countries fell from a collective 638.2Mt in 2019 to an estimated 591.1Mt in 2020. The reduced output from the iron ore giant, Vale, was the key factor behind Brazil’s reduced output, while delays in the auctioning of mines in Odisha affected India’s output in 2020.
“Miners in Australia were relatively unaffected by COVID-19 due to effective measures adopted by the Australian Government, while a speedy recovery in China led to a significant 10.4% increase in the country’s iron ore output.”
Looking ahead, the global iron ore production is expected to increase by 111.3Mt to 2,302.5Mt in 2021. Rio Tinto is expected to produce up to 340Mt of iron ore, while BHP has released production guidance of 245–255Mt, supported by the start of the Samarco project in December, which is expected to produce between 1–2Mt.The company has retained its guidance for Australian mines at 276–286Mt on a 100% basis, due to scheduled maintenance work at its ore handling plant and tie-in activity at the Area C mine and South-Flank mine.
Bajaj added: “The remaining companies are expected to produce more than 600Mt of iron ore, including FMG, whose production is expected to range between 175–180Mt supported by its Eliwana mine that commenced operations in late December 2020, and Anglo American, which is expecting to produce between 64–67Mt. Vale is expected to resume 40Mt of its production capacity, taking its overall production capacity to 350Mt in 2021, with production guidance of 315-335Mt.”