Adani buys Australian mine future royalty rights for USD 145 mn
Posted on Aug 28 2014 | IANS
Mumbai, Aug 28 : Adani Enterprises Thursday agreed to pay Australian dollars 155 million (USD 145 million) to Linc Energy of Australia to buy out the Australian firm's rights to future royalties from Adani's Carmichael coal project.
According to a Linc Energy statement, Adani will pay it AUSD 155 million in two instalment -- AUSD 90 million in cash within five days of the exercise of the option and the balance AUSD 65 million in cash on or before 12 months from the date of signing of the Deed of Assignment and Assumption.
Thursday's deal on the project, that has been much delayed due to Australian government approvals, means Adani Group need not pay royalties any longer as it is paying an amount upfront instead.
Adani, in a statement, said the agreement "reflects Adani's confidence in the progress of Carmichael mine, which received final federal environmental approvals from the Australian government last month".
The project in the Galilee Basin, which will become Australia's largest coal mine, is expected to provide electricity for up to 100 million people in India
The Carmichael project to be developed by Adani Mining involves open cut and underground coal mining in the north Galilee Basin which will produce 60 million tonnes of thermal coal per year as well as lead to development of 189 km of new rail infrastructure.
The project has an estimated 60-year resource value of USD 300 billion and at full production is projected to add USD 2.97 billion to Queensland economy each year.
Coal will be taken via a new rail line to the port of Abbot Point where Adanis will build a coal export terminal. Five million tonnes of seabed will be dug up and dumped within the Great Barrier Reef Marine Park in order to expand Abbot Point port.
The approval was announced by Australia's Environment Minister Greg Hunt, who said strict conditions imposed on the project will ensure protection of environment.
The Indian company will be required to ensure at least 730 megalitres of water are returned to the environment every year for five years.
Adanis are also required to monitor the condition of groundwater, offset the impact of cleared habitat and assess the impact to threatened species.