The MOU
with SBI is a significant milestone in the development of our Carmichael mine,
says Gautam Adani
Melbourne: Adani Enterprises Ltd won
support on Monday from the Indian government and an Australian state to help it
build a $7 billion coal mine, rail and port project, defying a slump in coal
prices to 5-1/2 year lows that has stalled rival projects.
The Indian trading and
infrastructure conglomerate signed a memorandum of understanding to line up a
loan of up to $1 billion from the State Bank of India for the Carmichael mine
in Queensland, which it aims to build by the end of 2017. “The MOU with SBI is
a significant milestone in the development of our Carmichael mine,”
Adani Group Chairman and founder,
Gautam Adani, who has close ties with Indian Prime Minister Narendra Modi, said
in a statement, following a signing in Brisbane. Adani came to Brisbane with a
business delegation from India for the G20 summit, which Modi attended over the
weekend. The company also won a commitment from the state government to take
short-term, minority stakes in rail and port infrastructure needed to unlock
massive coal reserves in the untapped Galilee Basin.
Coal from the region must be sent
400 km (250 miles) by rail to Australia’s east coast. “We are bringing on board
valued partners in different facets of this integrated project, ensuring we
will meet our guidance of first coal in 2017,” Adani Mining CEO Jeyakumar
Janakaraj said in a statement.
No final investment decision has
been made on the Carmichael project. Australia’s federal and Queensland
governments are eager to see the mine built following the loss of more than
4,000 coal jobs over the past two years, but analysts and project finance
experts believe Adani may have underestimated the challenge of raising funds
for the project. Adani, which is also facing a campaign by anti-coal
campaigners, is counting on lining up funding from South Korea, having named
Posco Engineering and Construction Co. Ltd as the preferred contractor to build
its rail line. Adani’s apparent momentum on the Carmichael project is in stark
contrast to rival Indian firm GVK’s slow progress on another huge coal mine in
the Galilee Basin, the Alpha project, which is co-owned by Australian
billionaire Gina Rinehart. Much bigger coal rivals, like BHP Billiton Ltd and
Glencore Plc, have also shelved coal developments in Queensland at a time when
a third of Australia’s coal output is making losses. Reuters
By
Shah Mohammad Abdul Qadir
PGDM 3rd Semester
IIM College of Management Noida.
Comment. Government is focusing to upgrade the value of Adani group and it seems that the Adani group is taking undue advantage to be an industry from the gujrat
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