Adani secures funding for $7bn Carmichael mine project in Australia

17 November 2014 (Last Updated November 17th, 2014 06:38)

Adani Enterprises $7bn coal mine, rail and port project in Queensland, Australia, has received a loan of up to $1bn from the State Bank of India (SBI), coinciding with the high-profile visit of Indian prime minister Narendra Modi.

Adani Enterprises $7bn coal mine, rail and port project in Queensland, Australia, has received a loan of up to $1bn from the State Bank of India (SBI), coinciding with the high-profile visit of Indian prime minister Narendra Modi.

The trading and infrastructure conglomerate signed a memorandum of understanding (MoU) with SBI for the Carmichael mine in Queensland, which has massive blocks of coal reserves untapped in the Galilee Basin. Adani is looking at a completion date of late 2017.

The state Government of Queensland has promised to commit short-term, minority stakes in rail and port infrastructure required to transport coal to the east coast.

"The state Government of Queensland has promised to commit short-term, minority stakes in rail and port infrastructure required to transport coal to the east coast." 

Commenting on the development, Adani Mining CEO Jeyakumar Janakaraj said: "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."

Although this new development in Carmichael mine project is being seen as a breath of fresh air from the five-and-a-half-year long slump in coal prices that has stalled rival projects, no final investment decision has been announced yet.

Adani is hopeful of securing funding from South Korea, and the company has already named POSCO Engineering & Construction as its preferred contractor to build the rail line.

Adani's funding approval comes at a time when bigger coal firms, such as BHP Billiton and Glencore, have shelved their major projects in the region due to mounting losses.

Indian rival GVK is also progressing very slowly on a huge coal mine in the Galilee Basin, the Alpha project, which is part-owned by Australian billionaire Gina Rinehart.