Adani buys Linc Energy's coal mines for Rs 12,600cr

Ahmedabad/New Delhi, Aug 3 (PTI) In one of the largest
coal mines deals by an Indian group, Adani Enterprises Tuesday
bought the Australia-based Linc Energy's coal assets for about
Rs 12,600 crore in a cash and royalty deal.
The Adani Group, which has interests sectors as varied
as power and ports among others, inked the agreement Tuesday
to buy the Galilee coal tenement of Linc Energy in the
Queensland province of Australia to feed its 20,000-mw
expansion plan in the power sector by 2020.
The deal involves an immediate cash payout of 500
million Australian dollars (about Rs 2,100 crore), besides an
additional payout of an estimated Rs 10,500 crore over next 20
years in royalties to Linc. Adani will pay a royalty of 2
Australian dollars on every tonne of coal mined over the next
20 years to Linc under the purchase agreement inked by its
subsidiary, Adani Mining Pty.
The royalty payment is estimated to aggregate to 2.5
billion Australian dollars, taking the overall deal size to 3
billion Australian dollar or about Rs 12,600 crore.
Domestic energy firms, mainly private players, have
increasingly been looking for assets abroad to meet their
expansion plans, as the world's second fastest growing large
economy's energy needs are increasing by the day. In the
recent past, Essar Power bought a coal mine in Indonesia and
ICVL, the PSU consortium of Coal India, SAIL and NTPC among
others, is also scouting for overseas coal mines.
At present, the demand-supply gap of coal is around 80
million tonnes, which is projected to double in the next few
years. To meet the widening gap, companies are looking for
overseas coal which is superior to domestic supply.
"We were in search of coal mines to enable the rapid
expansion of the power business of Adani Power, while also
expanding our coal business, where we are the largest importer
of thermal coal," Adani Enterprises chief financial officer
Devang Desai said in Ahmedabad, adding "as per our vision 2020
development plan, we aim to increase our power generation
capacity from 13,000 mw to 20,000 mw."
The Galilee tenement, which Adani agreed to buy, has
resources of 7.8 billion tonne coal, which makes it the
single largest tenement in Australia in terms of coal
resources, he said. Adani has already received regulatory nod
from Queensland for the deal he said, adding, "we will be able
to start mining in the next four years."
While multiple evacuation routes are available for the
mined coal, Adani was recently awarded preferred proponent
status for developing the Dudgeon point terminal in Macay,
Queensland, giving the company the right to develop a coal
terminal with 30-60 mmtpa capacity, Desai said.
Adani Power is working on 4,620-mw project in Mundra,
Gujarat. It has also announced two other projects in the
state, at Hazira and Dahej. Of late, Adani has been focusing
more on its power business and hopes to achieve a generation
capacity of over 16,000mw by 2013. PTI PD
MYR