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Adani to buy Carmichael coal project’s royalties rights from Linc for $145M

29 August, 2014

Adani Enterprises Limited has agreed to buy out Australian firm Linc Energy’s rights to future royalties from its Carmichael coal project for A$155 million ($145 million), according to a company statement.

Carmichael coal project in Queensland, northeastern Australia, is four years behind schedule as the mining at the project has been delayed due to the lack of several government approvals. The project received Australian government’s approval last month only.

“The company considers this transaction with Adani to be of benefit to shareholders given current coal market conditions and the projected time to first production from the Carmichael mine,” Linc Energy said.

Adani Group had bought the mine from Singapore-listed Linc for A$500 million in cash in August 2010. Under the agreement, Linc Energy was entitled to royalties of A$2 per tonne of coal, indexed to inflation, over the first 20 years of the production at the mine.

The Indian firm had planned to open the mine by 2014. At the time of signing agreement, Linc had said it could earn more than A$3 billion in revenue over the life of the royalty stream.

In the statement, Linc said that Adani will make a payment of A$155 million in two installments: A$90 million in cash within five days of the exercise of the option and the balance A$65 million in cash on or before 12 months from the date of signing of the Deed of Assignment and Assumption.

The ‘option’ is expected to be exercised between 50 and 65 days from the date of announcement.

(Edited by Joby Puthuparampil Johnson)


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Adani to buy Carmichael coal project’s royalties rights from Linc for $145M

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