Adani to kick-start Australia project.

The Adani group is working on the financial closure of its Australian coal mining project, which needs investments of $8 billion and is facing local environmental protests.

Analysts said capital expenditure for the Galilee mine in Queensland would start soon and Adani Enterprises would invest $3 billion in the next four years apart from the $1 billion it already had. The project comprises a mine, a railway and a port. The total investment in the project will be around $16 billion, making it biggest mine development in history.

The Adani group's recent equity restructuring has made it easier to raise loans at favourable rates.

The Adanis' private entities and Korea's POSCO, which will build the railway, will spend $1.5 billion on the port $2.5 billion on the railway, according to analysts with Axis Capital. 'This (equity restructuring of the Adani group) could be a precursor for the promoters to monetise part of the holding in the port business to support the power and mining businesses,' said an analyst with Axis Capital.

The Australian project is the most ambitious one by Gautam Adani, the Adani group's promoter. With a pro-business government at the Centre led by Prime Minister Narendra Modi, the group is expected to tie up funds for the project soon. The State Bank of India promised $1 billion after most other banks refused to lend for the Queensland project.


BS