Adani Enterprises, has received a US$1 billion boost from a state-owned Indian bank for its Carmichael coal project in Queensland, Australia, Reuters has reported.
The infrastructure conglomerate has signed a memorandum of understanding (MOU) with the State Bank of India (SBI) for the loan to help fund the mine, rail and power project. The loan would be one of the largest from an Indian bank for an overseas project.
The announcement comes as many other mining companies are cutting CAPEX in large greenfield projects on the back of weak coal prices and shedding jobs at existing operations.
The Indian company has also won a commitment from the Queensland government to take short-term, minority stakes in the rail and port infrastructure parts of the project.
India is currently suffering from an acute shortage of coal with many coal-fired power plants holding less than a week’s worth of supplies. Projects such as the Carmichael project and GVK’s Alpha project in the Galilee Basin are aimed at cutting this shortage by reducing reliance on the state-owned miner, Coal India.
The economics of such giant projects have been questions, however, as coal prices remain in a funk and many lenders come under pressure from environmental lenders to withdraw support from coal projects.
The Indian coal and power minister, Piyush Goyal, also recently indicated a push to increase domestic production to 1 billion t by 2019 and end coal imports within three years – potentially leaving projects like Carmichael stranded.
Written by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/mining/17112014/world-coal-one-billion-dollar-boost-for-adani-carmichael-coal-project-coal1581/