Adanis acquire coal assets in Australia for Rs 2,100 cr

The Adanis announced the acquisition of a major coal asset in Australia for Rs 2,100 crore. The Adanis are also acquiring two new ships from South Korea by December for importing the coal. Two-weeks ago, the Adanis were selected to develop a coal exporting terminal in Australia.

Flagship Adani Enterprises Ltd (AEL), through its Australian subsidiary, Adani Mining Pty Ltd, entered into an agreement with Link Energy Ltd  to purchase 100 per cent interest in its Galilee coal tenement in the Galilee Basin in Queensland, Mr Devang Desai, Executive Director and Chief Financial Officer (CFO) for Adani Group, told.

The purchase of the coal mine, with reserves of 7.8 billion tonnes almost all mineable, has received the approval of Australia's Foreign Investment Review Board (FIRB), and the Indicative Approval (in-principle approval) of the local government in Queensland, Australia.

Galilee is the largest single tenement in Australia in terms of coal resource. The purchase consideration, A$500 million ($455 million or Rs 2,100 crore), has already been paid to Link Energy and mining operations will start in 2014-15. The purchase consideration will be followed by payment of royalty for a 20-year period at $2 a tonne of coal mined.

The Adanis are the largest importers of thermal coal in India. The Australian coal has a better Gross Calorific Value (GCV) of around 5,000 kilo calories per kg of coal compared to Indian coal's nearly 3,000 kilo calories/kg. Mr Desai said the Adanis have been scouting for coal assets for their planned thermal power plants of 20,000 MW by 2020. For the plants of 13,000 MW under various stages of development, the company has coal linkages.