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Meijin Energy drops bid for mining lease at A$6.7B China Stone coal mine

Meijin Energy Co. Ltd. dropped its application for a mining lease for its proposed A$6.7 billion China Stone coal mine in Queensland, Australia, located next to Adani Enterprises Ltd.'s controversial Carmichael mine, ABC News reported May 23.

A spokesperson for the Queensland Department of Natural Resources, Mines and Energy confirmed to the news outlet that the process was terminated after the application for the five mining leases was abandoned in March.

Meijin Energy did not explain the move, but analysts said the project is no longer in line with China's coal policy and is not feasible financially given the difficulty Adani has faced for Carmichael.

Further, Adani's revised plan to scale down its project and proposed rail line may have affected the viability of China Stone. Under the new plan, Adani will use a smaller narrow-gauge line to connect to the network run by rail operator Aurizon, instead of a new standard-gauge rail line between Galilee Basin and Abbot Point.

Adani failed to secure a A$900 million loan via the Northern Australia Infrastructure Facility, which would have financed the construction of the new line. Meijin Energy had planned to used the line for the transport of coal from the China Stone project.

In late 2018, the company secured environmental impact statement approval from Queensland's Coordinator-General for China Stone, which was slated to produce 38 million tonnes a year of coal from an open cut mine and three underground mines.

The mine was originally planned for a 2015 construction, before weak coal prices ultimately forced Meijin Energy unit MacMines Austasia Pty Ltd. to stall the project.

MacMines CEO Russell Phillips confirmed that the project is under discussion and was "definitely" not being shelved, but declined to give further details.