Adani’s Mundra Port Acquires Abbot Point Coal Terminal for A$1.8 Billion

Adani Enterprises Ltd. (ADE), India’s biggest coal importer, agreed to pay A$1.8 billion ($2 billion) for the Abbot Point terminal in Australia’s Queensland state.

Mundra Port & Special Economic Zone Ltd., 77 percent owned by Ahmedabad-based Adani, was awarded a long-term lease to operate the terminal by the government of Queensland state, according to a statement to the Bombay Stock Exchange today. Queensland is selling the coal export terminal as part of an A$15 billion asset-sale program.

The company controlled by billionaire Gautam Adani is acquiring the coal port as India seeks to increase electricity generation capacity to sustain economic growth of more than 8 percent a year. Adani in August bought a Linc Energy Ltd. (LNC) coal asset for about A$3 billion, gaining control of the Galilee tenement in Queensland.

Adani gained as much as 2.1 percent to 642 rupees in Mumbai and traded at 632 rupees as of 10:52 a.m. local time. The shares have declined 2.8 percent this year, compared with a 7.3 percent drop in the benchmark Sensitive Index.

Australia’s northeastern state of Queensland, which raised more than A$4 billion selling shares of coal-train operator QR National Ltd. in November, started an asset-sale campaign to replace lost revenue and regain its AAA credit rating.

Photographer: Sam Panthaky/AFP/Getty Images

Gautam Adani, chairman of Adani Enterprises Ltd. Close

Gautam Adani, chairman of Adani Enterprises Ltd.

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Photographer: Sam Panthaky/AFP/Getty Images

Gautam Adani, chairman of Adani Enterprises Ltd.

Queensland, which initially expected to raise A$1.5 billion from the transaction, will use proceeds from the transaction to fund its share of the recovery costs following floods and Cyclone Yasi, the state government said in an e-mailed statement.

Australian Approval

“Taxpayers have done their bit to establish the terminal and entice investment,” state Premier Anna Bligh said in the statement. “It’s time for the private sector to take over.”

Australia’s Foreign Investment Review Board has approved the transaction, the government said.

Abbot Point, 25 kilometers (16 miles) north of the town of Bowen, has one terminal and is being expanded to 50 million tons from 21 million tons currently, according to its website. The terminal has exported coal since 1984, when it was commissioned.

Indian imports of power-station coal increased by 33 percent to 65.7 million metric tons in the year ending March 31, from 49.4 million a year earlier, India Coal Market Watch said last month, citing estimates based on port data.

India’s coal deficit may triple over the next five to seven years, a unit of Moody’s Investors Service said in a February report. The nation competes with China to secure supplies of coal, used for more than half of its electricity production.

To contact the reporters on this story: Rajesh Kumar Singh in New Delhi at rsingh133@bloomberg.net; James Paton in Sydney at jpaton4@bloomberg.net

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net

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