Mumbai: India’s Adani group has submitted an expression of interest to build two new coal terminals in Queensland, Australia as it looks to take advantage of the increasing coal traffic in the region, a senior executive said on Wednesday.
“We are looking to build greenfield ports next to Abbott Point, because there is huge demand for ports in Queensland,” B. Ravi, chief financial officer at Mundra Port and Special Economic Zone, the group’s port operating arm, told Reuters.
The new terminals would be next to the Abbot Point Coal Terminal, which Mundra Port acquired last month.
Located in North Queensland in Australia, the Abbot terminal services three mines in the Bowen Basin. The state of Queensland sold the terminal as part of a A$15 billion infrastructure privatization programme.
The Queensland government earlier raised at least $6.3 billion from the sale of the Port of Brisbane and the $4 billion float of rail freight business QR National Ltd.
Mundra expects to make some progress for the new terminals in the next six months, Ravi said. He did not disclose the investment involved.
Mundra acquired the Abbot Point Coal Terminal in Australia for about $2 billion to tap the growing coal traffic in overseas markets and ship coal from its Galilee coal project to power plants in India.
India holds 10% of the world’s coal reserves, but a shortfall in local supplies has grown rapidly due to rising coal-fired power plant capacity. The country is likely to import 135 million tonnes of coal in the fiscal year that began on 1 April.
The all cash deal was funded through short term mezzanine debt arranged by State Bank of India and Standard Chartered Bank, but Mundra is now in talks with banks to refinance that debt, Ravi said.
“At least seven banks have submitted proposals to us. We hope to complete the transaction in about four months time,” he said.
The Adani group last year acquired the Galilee coal project for $2.7 billion, marking the largest single mine investment by an Indian firm into Australia.
Shares in Mundra Port, which has a market value of $7.2 billion, closed 1.6% higher in a firm Mumbai market. Shares in the group’s flagship Adani Enterprises ended 0.4% lower.