Australia’s Linc Energy will sell its Galilee coal project to India’s Adani Enterprises in a cash and royalty deal worth A$2.7bn.

Under the terms of the deal, Linc will receive A$500m in cash and A$2 a ton in royalty for the first 20 years of coal production from the mine.

The Galilee project, located in the north-eastern state of Queensland, holds about 7.8 billion tons of coal and has the capacity to produce up to 60 million tons a year once the mine is fully operational.

The deal is the largest single mine investment by an Indian firm in Australia and could bring similar investments amid forecasts of acute shortages in India’s surging electricity output.