GVK, Adani last men standing for Australian coal port expansion.

Anglo American Plc's decision to quit plans for a coal port expansion in Australia leaves Indian billionaires G.V. Krishna Reddy and Gautam Adani as the last major investors left looking at extending the terminal.

Anglo, the world's fourth-biggest miner by market value, follows BHP Billiton Ltd. and Rio Tinto Plc in pulling out of Abbot Point in Queensland state. GVK Group and Adani Enterprises Ltd. are studying expansions at the port to export power station coal from separate mine projects they are planning inland in the Galilee Basin at a total cost of about $17 billion.

Anglo's move comes as thermal coal prices trade close to September's four-year low amid a global supply glut swollen by increased output from major producers including Glencore Xstrata Plc. GVK's Reddy, 76, has been in talks since 2011 to sell stakes in the $11 billion project, while Adani said in 2012 it had received approaches for minority stakes in its $6.4 billion development designed to supply its power plants in India.

'Anglo's decision further erodes confidence that the major mines being proposed in the Galilee basin can happen in the current price environment,' Matthew Trivett, a Brisbane-based analyst with Patersons Securities Ltd., said by phone. 'The ongoing weakness in the coal market makes it difficult for the returns to be adequate for the massive capital expense required to bring some of these peripheral basins like the Galilee into production.'


LIVEMINT