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csg mine Santa and Constable Vanessa Jayce Butcher Port Rivah and AJ Conway-James David Gibson and Santa (L-R) Lauren-Jade, Lucy and Marc Atkinson (L-R) Amelia, Mackenzie , Abby and Cassie Jo-Anne Burke, DB Scaffolding; Susan McGuire, Mayogroup Patty and Santa csg Vin Hamilton Aboutusgeneric_1 Indigo and Kate Wallace
csg mine Santa and Constable Vanessa Jayce Butcher Port Rivah and AJ Conway-James David Gibson and Santa (L-R) Lauren-Jade, Lucy and Marc Atkinson (L-R) Amelia, Mackenzie , Abby and Cassie Jo-Anne Burke, DB Scaffolding; Susan McGuire, Mayogroup Patty and Santa csg Vin Hamilton

Failure to launch
So does that mean $2 Billion worth of Drill, Blast and haulage contracts to go out to tender?
Wednesday 20 December 2017  

Adani Australia has yet to respond to queries from Shift Miner about how the more than $2 Billion worth of work on the proposed Carmichael coal mine will be fulfilled, following the abandonment of a Tier 1 contractor agreement with Downer Mining.

Under non-binding Letters of Award signed just before Christmas in 2014, Downer Mining was the business most likely to provide statutory management and operation of the proposed Galilee mining project, including drilling, blasting and the hauling of overburden and coal.

However despite all the fanfare, and time invested in getting the Letters of Award established, they have lived up to their non - binding nature with both parties walking away.

No clear picture has emerged about why the companies went separate ways, but the information has been almost invisible in Downer’s share price, suggesting most investors put little faith in the more than $2 Billion worth of work actually amounting to anything.

Even Downer itself had very little to say about the decision.

“Adani and Downer have mutually agreed to cancel all Letters of Award relating to the mine services and the related infrastructure,” Chief Executive Grant Fenn said.

“Downer will provide transitional assistance to Adani until 31 March 2018 and remains committed to growing its mining division.”

Instead, the Indian Company says it will own and operate the mine itself, despite having had no previous experience building and operating Australian coal mines.

“Following on from the NAIF veto last week and in line with its vision to achieve the lowest quartile cost of production by ensuring flexibility and efficiencies in the supply chain, Adani has decided to develop and operate the mine on an owner-operator basis,” the company said in a statement.

“Adani remains committed to developing the ­Carmichael project and will ­ensure the highest level of ­standards and governance.”

The decision is a long way from the excitement around the original agreements in 2014 when the mining downturn was at its height in Queensland.

At that time Adani Australia CEO Jeyakumar Janakaraj said the partnership with Downer reflected the “clear confidence” that tier one firms had in Adani's projects.

However looking back, despite it making front page news, Downer was circumspect about the value of the agreement in an interview with Shift Miner.

“Both Letters of Award are subject to the parties executing binding contracts which would be followed by pre-production and planning in early 2015 with mine infrastructure construction commencing in the fourth quarter of 2015,” they said at the time.