AusRAIL, Market Sectors

Adani?s $16.5bn mine nod a win for POSCO

<span class="" id="parent-fieldname-description"> South Korean engineering and construction group POSCO will build the rail line for the $16.5 billion Carmichael coal and rail project, which environment minister Greg Hunt approved on Monday. </span> <p>The decision from Hunt – a polarising one in the eyes of the public and in mainstream media – is a big win for POSCO, which joins Roy Hill EPC contractor Samsung C&ampT as a South Korean construction firm with a major resources project Down Under.</p><p>Adani, Carmichael’s Indian owner, announced POSCO as the rail contractor for Carmichael earlier this month, contracting it to build a 388km rail line in Queensland, from the mine project to the port of Abbot Point, where Adani owns a terminal.</p><p>Adani said POSCO was chosen for a combination of its strong capital position and experience.</p><p>“The binding agreement will enable us to develop a cost efficient rail solution and this relationship gives Adani access to the Korean market, POSCO’s expertise and capital,” Adani Australia chief executive Jeyakumar Janakaraj said.</p><p>POSCO Engineering &amp Construction president Tae-Hyun Hwang said: “This is the largest EPC project in the region for POSCO E&ampC, and we will put in our best effort to maximise our engineering, procurement and financing capabilities to successfully complete the construction.”</p><p>One condition of the state government’s earlier approval for the project also means the rail line will be open access to other coal producers.</p><p>This access will most likely be taken up by the Alpha coal project, which is also in the approvals stage. Alpha is a joint venture between Indian business GVK and Gina Rinehart’s Hancock Coal, and is expected to also export through Abbot Point.</p><p>Federal minister for environment Greg Hunt approved the Adani project on Monday, saying it would have to be built and operated under some of the strictest environmental conditions seen in Australia.</p><p>“The absolute strictest of conditions have been imposed to ensure the protection of the environment, with a specific focus on the protection of groundwater,” Hunt said.</p><p>Roughly 60 million tonnes of thermal coal will be moved from the Carmichael mine via the POSCO rail line, and will be exported primarily to service energy needs in India.</p>