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DOW - Downer EDI News Story

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Sector
Industrials
Size
Mid Cap
Market Cap £2.11bn
Enterprise Value £3.10bn
Revenue £6.58bn
Position in Universe 133rd / 1913

UPDATE 1-India's Adani drops contractor for Australian coal mine

Sun 17th December, 2017 11:31pm
* Adani says to build, operate mine by itself 
    * Rail line loan veto latest blow to long delayed project 
 
 (Adds Downer background) 
    MELBOURNE, Dec 18 (Reuters) - India's Adani  ADEL.NS  said 
on Monday it had canceled plans with Downer EDI Ltd  DOW.AX  to 
help develop and run its Carmichael coal mine in Australia after 
failing to secure a cheap government loan for the A$16.5 billion 
($13 billion) project. 
    The move marks the latest blow to the long-delayed 
Carmichael mine, which has yet to line up financing as a growing 
list of Australian and international banks, including three 
Chinese state lenders, have said they would not back the 
project. 
    Adani and Downer said on Monday they had agreed to cancel 
all letters of award for mine services and related 
infrastructure, after the premier of the state of Queensland 
said she would veto a A$900 million loan from the federal 
government's Northern Australia Infrastructure Facility (NAIF) 
for the mine's rail line.  urn:newsml:reuters.com:*:nL3N1OC2PX 
    "Following on from the NAIF veto last week, and in line with 
its vision to achieve the lowest quartile cost of production by 
ensuring flexibility and efficiencies in the supply chain, Adani 
has decided to develop and operate the mine on an owner operator 
basis," Adani Australia said in a statement. 
    The company said it remained committed to the project, which 
has been delayed for years due to numerous court challenges from 
green groups concerned about climate change and potential damage 
to the Great Barrier Reef. 
    The letters of award that Downer received in 2014 were 
preliminary agreements that were expected to lead to contracts 
worth more than A$2 billion over seven years to build 
infrastructure and run Adani's mine, Downer said at the time.  
    The companies never got to the stage of signing actual 
contracts, and Downer never included the A$2 billion in its 
pipeline of "work in hand". However its shares fell 1.6 percent 
in early trade on Monday in a broader market  .AXJO  that was up 
0.4 percent. 
     
($1 = 1.3082 Australian dollars) 
 
 (Reporting by Sonali Paul; Editing by Peter Cooney) 
 ((Sonali.Paul@thomsonreuters.com; +61 3 9286 1419; Reuters 
Messaging: sonali.paul.thomsonreuters.com@reuters.net)) 
 
Keywords: AUSTRALIA ADANI/
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