India’s Adani Enterprises has bought Linc Energy’s Galilee Basin coal deposits in a deal worth up to AU$ 3 billion over 20 years.
The deal, which is the largest single investment by an Indian company in Australia, will see Adani paying AU$ 500 million in cash, as well as AU$ 2/t in royalty for the first 20 years. The present net value of the deal is AU$ 1.5 billion, with the potential to double over 20 years, assuming the seam is mined out.
The Foreign Investment Review Board has approved the deal, and reports suggest that the Queensland Government will also approve the transfer.
The tenement has approximately 7.8 billion t of certified indicated resources. It is expected that Adani will aim to mine between 50 – 60 million tpa.
Adani’s chief financial officer, Devang Desai, is reported to have claimed that funding for the deal will be made with short-term loans and internal deals.
Adani is India’s biggest coal importer, and the deal will help feed the power plants that it is currently building in India.
Linc is now expected to focus on the sale of its other coal tenements, including the Teresa tenement, as it sharpens its focus on its gasification business.
Read the article online at: https://www.worldcoal.com/coal/04082010/linc_and_adani_agree_record_deal/