India's Adani Group is preparing to ship the first coal cargo from Australia's most controversial, Carmichael Mine. This move comes after battling a seven-year campaign by climate activists and defying a global push away from fossil fuels.

The Carmichael mine might be the last new thermal coal mine that will be built in Australia but it will be a vital source of supply for importers such as power plants in India.

"The first shipment of high-quality coal from the Carmichael mine is being assembled at the North Queensland Export Terminal in Bowen ready for export as planned," said the spokeperson for Adani's Australian subsidiary Bravus Mining & Resources in a statement.

The statement added that "we have already secured the market for the 10 million tonnes per annum of coal that will be produced at the Carmichael Mine".

When Adani bought the project in 2010, it envisioned building a 60-million-tonne-a-year mine with a 400-km rail line for around A$16 billion. It is one of several projects planned in the then untapped Galilee Basin. But in 2018, the mine plan shrank to 10 million tonnes a year following a sustained "Stop Adani" campaign by green groups.

According to Reuters, Adani's Australian CEO Lucas Dow said, "That sharpening of the plan has kept operating costs to a minimum and ensured the project remains within the first quartile of the global cost curve.”

However, the company has not disclosed the cost of the smaller mine and a 200-km rail line it built tying into an existing railway, but the project has been estimated at $1.5 billion.

The coal will be exported from a terminal at Abbot Point, which Adani bought for $2 billion in 2011 and renamed North Queensland Export Terminal.

According to analysts, this project made sense for Adani to dig the mine to help it make back the massive investment on the coal terminal, which has run nearly half empty since Adani acquired it.

"It's about maximising your cash flow returns on the railway line and maximising your profits on Abbot Point," said Tim Buckley, a director at the Institute of Energy Economics and Financial Analysis (IEEFA).

He said even though the Carmichael mine will become unprofitable as coal prices fall, Adani might have an incentive to expand it to 20 million tonnes a year to keep the port filled, when other mines supplying the terminal stop producing.

Image credit: ET Energy World