July 10, 2020 / 7:42 AM / a month ago

Adani Australia chief to step down as coal prices tank

MELBOURNE (Reuters) - Adani Enterprises’ Australian chief executive, Lucas Dow, will step down, the company said on Friday, as sinking coal prices add to climate change pressure to stretch the development timeline of a coal project in Queensland state.

Adani Mining Chief Executive Lucas Dow poses for a photograph outside a business breakfast in Townsville, northern Australia April 2, 2019. REUTERS/Melanie Burton/Files

Dow, who joined the company in April 2018, steered the Carmichael mine and rail project through a drawn-out and hotly contested permitting process, and then its first year of construction.

The project has provoked bitter controversy in Australia because it would open up a new thermal coal basin at a time of growing concerns over global warming.

“Adani Mining CEO Lucas Dow has advised the Adani Mining Board of his decision to step down from the role of CEO,” the company said, adding that Dow would stay on as a board director.

Current project director David Boshoff will take on the role of chief executive, based in Townsville, the firm said in a statement.

Boshoff, who spent five years at BHP Group’s Mount Arthur and Daunia coal mines, joined Adani last November.

Analysts have questioned the mine’s viability, given a steep fall in coal prices in the past two years, including a fall of 22% this year.

Prices for 5,000 kilocalorie coal sit at US$33 according to consultants AME Group, below the A$54 ($37) Adani estimated in January 2019 it would cost to bring its coal to port, when it also said it expected to have its first coal on rail by Dec 2020. Adani now sees first production in 2021.  

An Adani spokeswoman said the project’s economics remained strong and that it had further refined its costs since the January estimate.

The news comes amid increased pressure on Australia’s coal miners. On Thursday, one of the country’s biggest superannuation funds, First State Super, said it would divest from the sector by October as part of its response to climate change risks.

($1=1.4430 Australian dollars)

Reporting by Melanie Burton; Editing by Clarence Fernandez and David Evans

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