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I do think the current low coal price and the risk of not being able to develop Abbot Point port are key risks that potential investors have to keep in mind. Although the present value of the “Carmichael Royalty” is seemingly going to be able to support the current share price as elegantly demonstrated by Boon, if the Adani group decides that it is too much hassle eventually (for example, they have to dump the sand at some costly far far away sites), they can still run away. The present value of the “Carmichael Royalty” will then return to zero.
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1.
Adani threatens to scrap Abbot point over dredging delays
Quote: "Sandeep Mehta, chief executive of Adani Australia Coal Terminal, has told Queensland’s Minister of Environment there is “a real risk the project will not proceed” if dredging does not occur between March 1 and June 30, according to legal documents filed with Brisbane’s Administrative Appeals Tribunal that have been obtained by Fairfax Media. “Adani will also suffer at least one year’s worth of losses associated with not having cargo moving through the export port,” Mr Mehta said in an affidavit."
http://www.smh.com.au/business/mining-an...z36MawAlYf
2.
Effect of concerted protests by pro-environmental groups on willingness of banks to finance the project
Quote: "I’m not saying Adani’s Abbot Point project is illegal–the local government has approved it–or that it won’t get the required financing from other process. But there’s no guarantee, as yet, that it will get done either. Anything is possible."
http://www.forbes.com/sites/meghabahree/...ed-waters/
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1.
Adani threatens to scrap Abbot point over dredging delays
Quote: "Sandeep Mehta, chief executive of Adani Australia Coal Terminal, has told Queensland’s Minister of Environment there is “a real risk the project will not proceed” if dredging does not occur between March 1 and June 30, according to legal documents filed with Brisbane’s Administrative Appeals Tribunal that have been obtained by Fairfax Media. “Adani will also suffer at least one year’s worth of losses associated with not having cargo moving through the export port,” Mr Mehta said in an affidavit."
http://www.smh.com.au/business/mining-an...z36MawAlYf
2.
Effect of concerted protests by pro-environmental groups on willingness of banks to finance the project
Quote: "I’m not saying Adani’s Abbot Point project is illegal–the local government has approved it–or that it won’t get the required financing from other process. But there’s no guarantee, as yet, that it will get done either. Anything is possible."
http://www.forbes.com/sites/meghabahree/...ed-waters/