Diversified conglomerate Adani Enterprises Ltd will acquire a 100-per cent stake in the Galilee coal block in the Galilee Basin in Queensland from Australia's Linc Energy Ltd, for around $2.68 billion.

Adani will make a down payment of around A$500 million (US$455 million) in addition to an A$2 per tonne production-linked royalty payment extending up to 20 years. The coal block can produce up to 60 million tonnes per year once the mine becomes fully operational. This works out the acquisition cost to around A$2.94 billion (US$2.68 billion).

Adani Enterprises will acquire the Queensland coal block through its step-down subsidiary Adani Mining Pte Ltd, the company said in a filing with the Bombay Stock Exchange (BSE).

The Foreign Investment Review Board of Queensland has already approved the deal, Adani said.

Linc has been trying to hive-off its Emerald coal tenements known as Teresa located in Queensland since September 2008, and had then announced that it had signed a $1.5 billion heads of agreement with China's Xinwen Mining, but the global recession led to the deal collapsing.

By late April 2009, apart from Emerald coal tenements, Linc added its Galilee and Pentland coal assets to the sale.

On 14 July, The Economic Times reported citing two independent sources that Adani Enterprises' Singapore subsidiary Adani Global is close to finalising a deal worth $1 billion to acquire the coal assets in Queensland of Linc Energy. (See: Adani Enterprises in talks to buy Australia's Linc Energy's coal assets for $1 billion) 

The Galilee block has coal reserves of around 7.6 billion tonnes that comply with Australia's Joint Ore Reserves Committee (JORC) quality standards. It is also the largest coal reserve in Queensland in terms of recoverable coal resources.

Queensland government has also awarded Adani the contract to develop the Dudgeon Point coal terminal in Mackay on a preferential basis. This gives Adani the right to develop a coal terminal of between 30 and 60 million metric tonnes per annum capacity.

Dudgeon Point lies near the existing coal terminal of Hay Point and Dalrymple Bay Coal Terminal.

Adani's Mundra Port and Special Economic Zone (MPSEZ) is also looking to acquire Australia's state-owned Port of Brisbane.

Adani proposes to use coal from the Galilee basin to support its power business expansion in India.

Adani, India's largest importer of coal, is also expanding the coal terminal at its Mundra Ports and SEZ. It is also looking at developing new port facilities in Gujarat, Goa and Orissa to handle imported coal.

Adani last month raised Rs4,000 crore in the domestic market through private placement for coal mine acquisitions. (See: Adani raises Rs4,000 crore in QIP placement of shares) 

Adani Group has entered into a long-term arrangement for imported coal with suppliers in Indonesia and China.

The group has mining operations in Indonesia where it has entered into agreements with holders of long-term exploitation licences to exclusively mine coal in Bunyu Island.

Adani Enterprise is also exploring mining and port development opportunities in South Africa. Bloomberg yesterday reported that Adani plans to import 400,000 metric tons of coal by the end of the year from South Africa for ACC Ltd, India's biggest cement maker, the cement unit of Grasim Industries and Jaypee Cement.

The coal will be imported as part of orders for 200,000 tons from ACC and 100,000 tons each from Grasim and Jaypee.

Adani group has also been allocated two coal blocks in India for use in the Tiroda Power Project in Maharashtra.

The group's listed power entity Adani Power aims at commissioning 16,000 MW of generation capacity by 2013, even as it is planning to set up a power project in Kosovo in Europe.

AEL's Singapore-based subsidiary Adani Shipping has entered into a contract for the purchase of two newly-built capesize vessels for transportation of coal.