Here's some really simple maths explaining why it just doesn't stand up financially:
1. Plan is for a 10m ton per year mine, rising to 20mtpa
3. So your revenue is ~$660m in the first stage
So that's $3bn.
7% of A$3bn is US$140m of interest each year.
The project is now not making a cent of profit.
(a) taxpayer-funded below-market-rate loan from the Australian government. Only really credible on the $1.5bn rail. But hard to see that shaving more than $40m or so in interest, and it wouldn't affect the D&A.
But of course, they do. Why build a A$3bn infrastructure project to buy low-quality coal from a remote basin when you could buy it for less on-market?
My best guess for Adani is that Carmichael is currently an exploration asset worth something like $1.3bn, perhaps more.
If Adani cancels the project that asset has to be written off.
The Coalition have spent the past decade wedging Labor on the issue, and just in part won an election on it. It's the gift that keeps on giving.
The common belief is that banks won't fund it because they're scared of environmentalists.
Believe me, this won't stop them funding big petroleum projects.
They're quite happy to get some good green PR from announcing they won't fund it, but it's about the bottom line.
Only state funding can stave off economic reality. (Ends)
It's about half the rail distance to port of Carmichael (and remember that rail freight is one of the biggest cost elements for coal) but Glencore mothballed it in 2012ish
It's because Glencore are really good at forecasting long-run supply-demand dynamics and they don't see sufficient demand to justify additional supply.
People should take that judgement seriously.