Adani suspends two Carmichael contractors - SMH report

SYDNEY (Reuters) - Adani Mining has suspended two major contractors on its $7.4 billion Carmichael coal project in Australia, the Sydney Morning Herald reported on Wednesday, raising fresh doubts about the project's future.

Project manager Parsons Brinckerhoff and Korea's POSCO Engineering & Construction Co Ltd, which is also touted as an investor in the final project, were told late last week to stop work on the Carmichael mine, rail and port project, the newspaper said, citing sources.

Adani's office in Australia did not immediately respond to requests for comment on Wednesday. A spokeswoman for Parsons Brinckerhoff referred a query on the contract to Adani. POSCO could not immediately be reached for comment.

Both contractors have big roles in the project. Parsons Brinckerhoff are the principal project management consultants, while POSCO is due to build Adani's 388-kilometre (242 mile) rail line from the mine to the sea and take a financial stake in the development.

Adani had raised concerns about the project's financing last month when it said it was rejigging the budget for the mine.

Adani intends to ship most of the coal to India for use in generating household power, which would help Prime Minister Narendra Modi achieve his goal of connecting the whole country to the electricity grid during his tenure.

The company said then that the project's budget, based on previous anticipated approval timelines and milestones, was no longer achievable due to delays in receiving various approvals from the Queensland state government. It also confirmed it had suspended the contracts of four engineering firms while waiting for those approvals.

Adani has signed up buyers for about 70 percent of the 40 million tonnes of coal the Carmichael project is due to produce in its first phase.

The project mainly hinges on environmental approval to deepen a port on the fringe of the Great Barrier Reef in order to ship the coal, a proposal generating opposition worldwide.

(Reporting by Byron Kaye and Jim Regan; Writing by Jane Wardell; Editing by Will Waterman)