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Saturday, February 25, 2012

Adani to spend heavily on Australian coal assets

Saturday, 25 Feb 2012

INDIA’S Adani Group plans to spend as much as USD 6 billion in Australia over the next three years to develop coal mines and related infrastructure and is interested in buying a majority stake in a gas company at home as the conglomerate gears up to expand operations.

Mr Ameet H Desai spokesman told a news conference that in Australia, Adani will invest at the Abbot Point coal terminal where it acquired operating rights last year, with funds also going to mining activities and building a railway line connecting the terminal with its coal mines in the Galilee basin.

Mr Desai said the group is arranging the funds through a mix of equity, debt and internal accruals.

The group plans to use coal sourced from Australia to run its own power stations and also for trading, primarily in India where a shortage of the dry fuel is hurting power generation.

Demand for coal is rising in India as many new power stations are coal based, but complicated environmental clearances and problems in land acquisition are delaying domestic mining projects.

The group started mine exploration work at the Galilee basin.

Its Adani Ports and Special Economic Zone unit spent USD 2 billion for a 99 year lease of the Abbot Point terminal in Queensland. The terminal can handle 21 million metric tonnes coal a year.

An executive said the company is refinancing most of the bridge loan taken to fund the Abbot Point deal through another loan of USD 1.8 billion. The loan will be from four Australian banks and the process should be completed in a few weeks.

Meanwhile, chairman Mr Gautam Adani said the group is interested in buying BG Group's 65% stake in India's Gujarat Gas Co. He didn't give details, but spokesman Mr Desai said the group is conducting due diligence before submitting a bid.


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