SYDNEY - [AAP] India's Adani group has cancelled all contracts awarded to a major contractor for its controversial Carmichael coal mine after deciding to develop the project on its own.

Engineering group Downer EDI (ASX: DOW) on Monday said it had mutually agreed with Adani to end all contracts awarded to it since 2014.

The ASX-listed group in 2014 received a $2 billion contract to provide technical services to Adani including drilling, blasting and coal and waste haulage for the mine, although the scope of work has since changed.

The decision comes at a time when the Indian group has been struggling to secure funding for the first stage of the Carmichael project, that is in the north of the Galilee Basin in Central Queensland.

Earlier in December, Chinese lenders ruled out providing finance for the Adani Carmichael coal mine, joining Australia's big four banks in avoiding the controversial project, which has long been a target of environmental groups and activists.

Queensland's newly-elected government has also vetoed Adani's request for a $1 billion loan from the Northern Australia Infrastructure Facility.

"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 said in a statement.

Downer said it will provide Adani transitional assistance until March 31, 2018, while India business reiterated its commitment to develop the Carmichael mine and rail line.

 

AAP logo image

© [2017] Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.