NEW DELHI: Adani Enterprises on Wednesday announced a $1.65-bn deal with the Indonesian government and its mining company PT Bukit Asam for setting up rail and port infrastructure in the island nation for sourcing coal to India.
Adani Enterprises, through its Indonesian subsidiary PT Adani Global, has entered into a binding tripartite agreement for setting up a dedicated ‘rail and port project’ with the Indonesian government and PT Bukit Asam, the Indonesian government-owned coal mining company.
“As per the agreement, we will be investing $1.65 bn (approximately Rs 7,500 crore) in building infrastructure, which includes port and railway lines in South Sumatra province of Indonesia,” said Devang Desai, chief finance officer, Adani Enterprises. The company plans to commence construction as soon as it is granted all the necessary clearances. “We look to start construction there in the next three months after getting all the clearances and would be completed in 48 months,” he said.
“As per the deal, we have exclusive rights over 60% of the coal from coal reserves of Bukit Asam in the province,” Mr Desai said. This is part of the main business of importing coal to cater to various user industries in India, Mr Desai added. He also said there is a huge demand of coal in India, which is expected to grow manifold in the next two years.
At present, Adani Enterprises imports 35 million tonne of coal and is likely to hike this capacity to about 60-70
million tonne in the next 3-4 years. Indonesian mines have an estimated reserves of about two bn tonne and right now it is expected to mine 35 million tonne, which can be ramped up to 60 million tonne in next few years.
“We have exclusive rights to buy 60% of that output at government notified prices,” he said, adding that the agreement is for a maximum period of 30 years and the prices for the transportation has been linked to the CPI and fuel prices.
The company’s Indonesian endeavour will be funded at a debt and equity ratio of 70:30. The equity portion will come from the Adani Enterprises and the Indonesian subsidiary and debt is yet to be tied up. Meanwhile, Adani Enterprises, which plans to focus on the energy sector bought the Australia-based Linc Energy’s coal assets for about Rs 12,600 crore in a cash and royalty deal, earlier this month .
Adani Enterprises, through its Indonesian subsidiary PT Adani Global, has entered into a binding tripartite agreement for setting up a dedicated ‘rail and port project’ with the Indonesian government and PT Bukit Asam, the Indonesian government-owned coal mining company.
“As per the agreement, we will be investing $1.65 bn (approximately Rs 7,500 crore) in building infrastructure, which includes port and railway lines in South Sumatra province of Indonesia,” said Devang Desai, chief finance officer, Adani Enterprises. The company plans to commence construction as soon as it is granted all the necessary clearances. “We look to start construction there in the next three months after getting all the clearances and would be completed in 48 months,” he said.
“As per the deal, we have exclusive rights over 60% of the coal from coal reserves of Bukit Asam in the province,” Mr Desai said. This is part of the main business of importing coal to cater to various user industries in India, Mr Desai added. He also said there is a huge demand of coal in India, which is expected to grow manifold in the next two years.
At present, Adani Enterprises imports 35 million tonne of coal and is likely to hike this capacity to about 60-70
million tonne in the next 3-4 years. Indonesian mines have an estimated reserves of about two bn tonne and right now it is expected to mine 35 million tonne, which can be ramped up to 60 million tonne in next few years.
“We have exclusive rights to buy 60% of that output at government notified prices,” he said, adding that the agreement is for a maximum period of 30 years and the prices for the transportation has been linked to the CPI and fuel prices.
The company’s Indonesian endeavour will be funded at a debt and equity ratio of 70:30. The equity portion will come from the Adani Enterprises and the Indonesian subsidiary and debt is yet to be tied up. Meanwhile, Adani Enterprises, which plans to focus on the energy sector bought the Australia-based Linc Energy’s coal assets for about Rs 12,600 crore in a cash and royalty deal, earlier this month .
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