Adani Enterprises Ltd., India’s biggest coal importer, agreed to buy an Australian coal asset for A$500 million ($456 million) from Linc Energy Ltd.
Adani Enterprises will also pay a royalty linked to coal production for 20 years as part of the agreement, the Ahmedabad-based company said in a statement. The acquisition gives billionaire Gautam Adani-controlled Adani a tenement, or permit, in Queensland’s Galilee basin.
India is increasing imports of coal to meet rising demand in an economy that has grown an average 8.4 percent since 2004, straining capacities at roads, ports and factories. Adani Power Ltd., a sister company, plans to build power plants with a combined capacity of 6,600 megawatts by 2012, director Ameet Desai, said last August.
“It is about securing high calorific, good quality coal for its expansion plans,” Deven Choksey, chief executive officer at K.R. Choksey Shares & Securities Pvt. that owns shares in Adani Enterprises, said before the announcement. “High quality coal helps operate power plants at higher capacities.”
Adani Enterprises, which advanced 43 percent this year, gained as much as 3 percent to 628.20 rupees and traded at 621.60 rupees as of 1:59 p.m. in Mumbai. Linc requested its shares be halted from trading in Sydney pending an announcement on the sale. The Brisbane-based company last traded at A$1.86.
Indian thermal coal imports surged last year to a little less than 60 million tons from about 30 million tons in 2008, Macquarie Group Ltd. said in a report in March. India plans to almost double electricity generation capacity by 2012, when the shortage of coal will exceed 200 million tons.
“Mining in India can be a problem with mines located in areas that Maoist issues,” Choksey said, referring to the insurgent group that operates in parts of India.