India's Adani to press ahead with Australia coal plans
By Rosemary Arackaparambil and Prashant Mehra
AHMEDABAD, India (Reuters) - As global mining giants scale back their ambitions in Australia's coal sector, Indian billionaire Gautam Adani is showing no such caution in pushing full-steam ahead with a $4.5 billion project in a bet on rising Indian demand.
The mine is central to plans by Adani, a college-dropout who by last year was worth more than $8 billion, to secure coal to feed an expansion of the Adani Group's power production capacity in India, which suffered massive blackouts in July and August as the country struggles to meet electricity demand.
Adani expressed confidence in being able to secure funding for the Carmichael coal mine in Queensland by the end of the year even as lenders turn their backs on other projects in the resource-rich country. Adani aims to start production in 2014 and build up to output of 60 million metric tonnes by 2020.
"Our Australia plan is completely on the dot, as per schedule," Adani told Reuters in an interview in his modest-looking office in the western Indian city of Ahmedabad.
"We have our ready market, our own consumption, our own trading, country's need, country's need will improve, as well our aspiration of also entering the global trading market," he said.
Despite the upbeat comments, investors have been less than impressed. Shares in the group's loss-making power firm Adani Power Ltd (ADAN.NS: Quote) have fallen close to 18 percent this year on concerns over debt and lack of pricing power as the main benchmark index .BSESN has gained more than 20 percent.
He said his Adani Group could reduce its debt-to-equity ratio to below one by 2015 from more than two now if Adani Power is allowed by Indian authorities to pass on more of the increasing cost of imported fuel to end users. The issue is under adjudication.
Adani's plan to spend $4.5 billion developing the Carmichael coal mine comes as global mining giants such as BHP Billiton (BHP.AX: Quote), Rio Tinto (RIO.AX: Quote) and Xstrata XTA.L have put investments on hold and cut jobs in Australia after a sharp fall in iron ore and coal prices. Continued...