Adani Group’s Australian coal mine losses of nearly $800 million raising question on its financial viability
Adani Group’s coal mine insurer in Australia is said to be reviewing its corporate climate change strategy as project losses close to the $800 million mark in the face of the depleting valuations caused by the coronavirus pandemic.
According to the Sydney Morning Herald report, Bermuda-based Aspen Reinsurance, the insurer of the Adani Carmichael coal mine in central Queensland, assesses its “fossil fuel appetite underwriting,” adding that a major effect on the valuation of the coal mine could increase Carmichael ‘s reliance on its parent company in India.
“We are currently reviewing our underwriting appetite around fossil fuel but cannot comment further at this time,” the spokesman of Aspen Re told the Australian daily. “Aspen understands the importance of environmental, social, and governance issues.”
Aspen Re is one of the four global insurance companies that are part of Adani’s Carmichael coal and rail projects. Liberty, HDI and AXL, the other three insurers, will not provide project insurance after their current residual policies have ended, the report added.
The news raises questions about the financial viability of Adani ‘s Australian arm, as the project recorded losses of $279 million in FY20, taking its cumulative losses, including write-offs and currency movements, to $794 million since its inception.
The Gautam Adani-led company, however, refuted claims that there was “no doubt” about the viability of the project as a strong demand for thermal coal in the south and south-east Asia would boost productivity.
“The construction of the Carmichael project is now well progressed with more than $1 billion in contracts awarded,”a spokesperson of the Indian group told the daily.
