Financial viability of Adani Group’s Australian coal mine in question as losses near $800 million
The insurer of Adani Group’s coal mine in Australia is reportedly reviewing its corporate policy on climate change as losses of the project near the $800 million mark in face of the depleting valuations triggered by the coronavirus pandemic.
According to a report in Sydney Morning Herald, Bermuda-based Aspen Reinsurance, the insurer of Adani Carmichael coal mine in central Queensland, is evaluating its “underwriting appetite around fossil fuel” adding that significant impact on the valuations of the coal mine could increase Carmichael’s dependence 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 among the four global insurance companies that underwrites Adani’s Carmichael coal mine and rail project. Liberty, HDI and AXL, the other three insures, will not provide insurance on the project after their current residual policies come to an end, the report added.
The news raises questions over Adani’s Australian arm’s financial viability as the project logged losses of $279 million in FY20, taking its cumulative losses including write-offs and currency movements since inception to $794 million.
The Gautam Adani-led company has, however, refuted the claims saying that there was “no doubt” about the viability of the project as strong demand for thermal coal in the south and south-east Asia would drive 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.
Source: Financial Express