Global investors and the Carmichael mega-mine

17 minute read

Some of the world's top investors, such as Allianz and Norges Bank Investment Management, have large exposures to Adani Ports. We present indications that the funding is reducing cost-of-capital for the Carmichael coal mega-mine.

However, Investors in Adani Ports and Special Economic zone (ADSEZ) bonds and equity should engage and/or divest to halt potential alternative financing or other assistance to the Carmichael project through the company, in our view.

Operations at the Carmichael coal mine is set to commence shortly. Alongside that, a logistic chain will be created that essentially opens up one of the world’s largest untapped coal reserves.

Recently, Adani Abbot Point (ADAABB), a subsidiary of Adani Group which in turn is a controlling owner of ADSEZ, has been the remaining private funding vehicle of this chain. However, it has come across financing and operation difficulties due to investor and service provider withdrawals on the back of perceived negative environmental exposure. Court rulings amongst other sources indicate that ADSEZ is operating in a concerted fashion with ADAABB and is integrated into the Carmichael value chain.

Thus, we believe that the coal development critique of ADAABB should also apply to ADSEZ.