LNC - Linc Energy
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Someone bought around 1 million Linc shares at the close today. Stock moved up 2.5c. Sadly a far cry from the good old days when someone bought 4 million shares at the close and made the price jump 20%! Still, a positive move by someone, lets hope they know more than the rest of us. 
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I think the very late million share purchase could be an astute move by a fund manager wanting to get into LNC.
Basically it caused very little disruption to the market but effectively pulled out a million plus shares that have probably been sloshing back and forth in daily trades. With a bit of luck these won't come back onto the market and any future demand will put more pressure on SP.
And who knows... The next coal sale may well be around the corner.
Basically it caused very little disruption to the market but effectively pulled out a million plus shares that have probably been sloshing back and forth in daily trades. With a bit of luck these won't come back onto the market and any future demand will put more pressure on SP.
And who knows... The next coal sale may well be around the corner.
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RE: Snowking, as per previous announcements to the market LNC is negotiating the sale of their emerald and (can't remember the name of it currently ), anyway two more coal tenements. Some figures that have been bandied about are 300 million to 500 million, this'll increase the bank balance of LNC to more than the MC! So a rerating will probably occur when it happens, but before then I expect LNC to slowly rise in expectation of news of a coal sale (or advancing negotiations). If a sale (or hopefully bot) goes through I'd expect the price to be about $2.50 to $3 based purely on a fundamental analysis of the share. However by that token if both fail to sell (highly unlikely due to the high price of coal and the needs of China/India for coal) I'd expect LNC to trade lower to about $1.50 as they'll be holding onto coal tenements that they are unwilling to develop.
), anyway two more coal tenements. Some figures that have been bandied about are 300 million to 500 million, this'll increase the bank balance of LNC to more than the MC! So a rerating will probably occur when it happens, but before then I expect LNC to slowly rise in expectation of news of a coal sale (or advancing negotiations). If a sale (or hopefully bot) goes through I'd expect the price to be about $2.50 to $3 based purely on a fundamental analysis of the share. However by that token if both fail to sell (highly unlikely due to the high price of coal and the needs of China/India for coal) I'd expect LNC to trade lower to about $1.50 as they'll be holding onto coal tenements that they are unwilling to develop.
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Snowking! Flip through the last few months on this thread. Some of the folk have written some very fact ladden stuff.
As for jump today, following a 1 million share purchase at close on Friday, one can olny speculate.
I continue to hold LNC.
I was aware of the recent news and have followed the thread closely.
I was just looking at the price action for the last month and given there hasn't been an upward move that strong during that time I thought there may have been some further news/speculation regarding current negotiations to fuel the SP rise, hence the question...it would appear there wasn't
I was just looking at the price action for the last month and given there hasn't been an upward move that strong during that time I thought there may have been some further news/speculation regarding current negotiations to fuel the SP rise, hence the question...it would appear there wasn't
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Linc issued a routine letter saying it knew no reason for the sudden price jump yesterday.
Still a couple of interesting points in the statement
1) It reminded the market that they are still on track for sale of the Teresa coal tenements as previously discussed.
2) It seems that Adani is now looking to actually buy the land where it's bright new coal acquisition is located. That is a further commitment which may indicate additional activity. Let's remember that there was a side deal with Adani on LNC co developing any UCG/GTL activity with the previous coal sale.
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Still holding and still expecting a BIG re rating..
http://www.businessspectator.com.au...ce-jump-pd20100920-9G6BY?OpenDocument&src=hp9
Still a couple of interesting points in the statement
1) It reminded the market that they are still on track for sale of the Teresa coal tenements as previously discussed.
2) It seems that Adani is now looking to actually buy the land where it's bright new coal acquisition is located. That is a further commitment which may indicate additional activity. Let's remember that there was a side deal with Adani on LNC co developing any UCG/GTL activity with the previous coal sale.
______________________________________________________
Still holding and still expecting a BIG re rating..
http://www.businessspectator.com.au...ce-jump-pd20100920-9G6BY?OpenDocument&src=hp9
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Looks as if LNC is again trying to keep up the price. The improvement in Syngas production report looks interesting but I wonder what the actual final production result will be.
Market ended even lower after the announcement. Let's see the next coal sale please.
http://www.vision6.com.au/download/...an doubles UCG syngas flow rates 24-09-10.pdf
Market ended even lower after the announcement.
Let's see the next coal sale please.http://www.vision6.com.au/download/...an doubles UCG syngas flow rates 24-09-10.pdf
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Does anyone know of any previous flow rates for UCG for linc?
PB mentions carbon tax
http://www.theaustralian.com.au/bus...chief-peter-bond/story-e6frg8zx-1225929097122
PB mentions carbon tax
http://www.theaustralian.com.au/bus...chief-peter-bond/story-e6frg8zx-1225929097122
hello people
does or do the recent annoucments of the board changes and new appointments of directors seem to be a plus or a minus for the futurte of LNC?
recently a director has sold at top of market and now we see a reshuffle of some key players / people in power.
So can PB keep it all together and produce the goods so to speek?
maybe basilio is onto this ?
does or do the recent annoucments of the board changes and new appointments of directors seem to be a plus or a minus for the futurte of LNC?
recently a director has sold at top of market and now we see a reshuffle of some key players / people in power.
So can PB keep it all together and produce the goods so to speek?
maybe basilio is onto this ?
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Apparently BJ was heavely invested in a gold plant and was pouring all his money into that while waiting for fudning from Maq bank and is going overseas to work on his gold project in the Dominican Republic .
I think the company is EVG. This is all according to another poster who speaks to him and is the largest shareholder in his gold plant.
I think the company is EVG. This is all according to another poster who speaks to him and is the largest shareholder in his gold plant.
Thanks for that info, Jonathan.
From the links below you can verify that BJ is Executive Chairman of Envirogold and has recently rearranged his family finances. In particular, check out the "Newsroom" on Envirogold's website and the "Change in Director's Interest Notice" dated 16 July 2010 for a fuller explanation.
This should dispel any speculation that the LNC Chairman was selling because LNC's prospects were no good.
It has also been announced that BJ is standing down as Chairman and Director at the forthcoming AGM as he intends being overseas with his other business interests for 2 years
http://www.envirogold.com/
http://imagesignal.comsec.com.au/asxdata/20100806/pdf/01086214.pdf
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Australian company seeking natural gas in Point MacKenzie
By TRACY KALYTIAK
For the Frontiersman
Published on Saturday, September 25, 2010 11:00 PM AKDT
State officials are nearing a decision on whether an Australian company will be allowed to seek natural gas in the Point MacKenzie area.
Linc Energy Operations Inc. could begin constructing its so-called LEA#1 well as early as this week.
Linc Energy?s Australia-based spokesperson, Greg Meyer, did not immediately reply to an e-mail seeking comment, but an Aug. 16 Austock Securities research report mentioning the project stated, ?Lea #1 is a wildcat exploration well within 20km of Anchorage city, targeting multi-hundred billion cubic feet of gas. ... The site is within 5 miles of an inlet valve to an under-utilised 20inch gas pipeline which feeds to the power station and beyond to Sarah Palin?s neighbours!?
Information Linc submitted in its applications for necessary state and federal permits, stated the vertical well will be situated on a 10-acre site about two miles north of Point MacKenzie Road, off Goose Creek Road. An approximately 2.2-acre gravel pad will support drilling operations.
?We received no public comments,? said Nina Brudie, an oil and gas project review manager for the state?s Alaska Coastal Management Program. ?I was not particularly surprised because they?re putting a well pad on a previously disturbed piece of property. It doesn?t involve filling raw wetlands, doesn?t have the level of environmental impact it would otherwise have. They?re using existing access roads to access the site.?
Susan Lee, a Mat-Su Borough planner, said the state supervised scrutiny of the proposed Linc Energy project and the borough reviewed the project to ensure it complied with coastal management policies.
The LEA #1 well will target conventional natural gas in the Middle and Lower Tyonek Formations as well as the Hemlock Formation. The well will be located less than two miles from the Enstar 20-inch natural gas pipeline.
The Linc Energy well site is situated more than four miles from the coast, according to a coastal project questionnaire and certification statement submitted by Linc Energy?s project manager Corri Feige. It is not expected to affect the nearest body of water, Goose Creek, which is about a half mile to the northeast of the anticipated project site.
The questionnaire also stated that the area surrounding the proposed well location is sparsely populated and that the drill rig to be used at the site is equipped with residential-grade mufflers to further reduce noise.
Dry drill cuttings will be permanently disposed of in the Mat-Su Central Landfill and fluids ? including any produced water ? will be disposed of by a commercial disposal service or through an annular injection permit from the Alaska Oil and Gas Conservation Commission.
An archaelogist surveyed the proposed drilling site in June to ensure construction would not affect or damage historical or cultural resources in the area. A report of the survey findings was filed with the State Historic Preservation Office and the Mat-Su Borough?s historical preservation office in July.
All water required for the drilling process, the questionnaire stated, will come from either a pre-existing water well at the site or purchased and transported to the location.
The well will be drilled to an approximate bottom hole depth of 7,000 feet.
?The well will be lined with steel drill casing and cemented to approximately 1,500 feet, well below zones used for drinking water. Only water-based drilling fluids will be used, deploying standard drilling industry practices.?
Temporary drilling activities at LEA No.1 are expected to last three to four weeks and equipment will be removed after drilling has ended. If the company discovers natural gas at the site, it could later proceed with getting authorization to drill a delineation well and continue exploration. If the results of the initial drilling prove to be disappointing, the company would plug and abandon the well.
Initial drilling is expected to continue through December. Additional well testing or planning for additional wells is slated for January through March 2011, if required.
Advance prospect exploration ? selection and permitting of additional wells and related tasks ? could take place between April 2011 and January 2012.
?Discovery of a natural gas resource would meet both the local community and broader community needs in South-Central Alaska,? the questionnaire stated. ?...drilling techniques that allow for multiple wells to be drilled from a single location would be considered in the future, if appropriate for development and geologic realities.?
http://www.frontiersman.com/articles/2010/09/26/local_news/doc4c9eecc1a8dea311995611.txt
By TRACY KALYTIAK
For the Frontiersman
Published on Saturday, September 25, 2010 11:00 PM AKDT
State officials are nearing a decision on whether an Australian company will be allowed to seek natural gas in the Point MacKenzie area.
Linc Energy Operations Inc. could begin constructing its so-called LEA#1 well as early as this week.
Linc Energy?s Australia-based spokesperson, Greg Meyer, did not immediately reply to an e-mail seeking comment, but an Aug. 16 Austock Securities research report mentioning the project stated, ?Lea #1 is a wildcat exploration well within 20km of Anchorage city, targeting multi-hundred billion cubic feet of gas. ... The site is within 5 miles of an inlet valve to an under-utilised 20inch gas pipeline which feeds to the power station and beyond to Sarah Palin?s neighbours!?
Information Linc submitted in its applications for necessary state and federal permits, stated the vertical well will be situated on a 10-acre site about two miles north of Point MacKenzie Road, off Goose Creek Road. An approximately 2.2-acre gravel pad will support drilling operations.
?We received no public comments,? said Nina Brudie, an oil and gas project review manager for the state?s Alaska Coastal Management Program. ?I was not particularly surprised because they?re putting a well pad on a previously disturbed piece of property. It doesn?t involve filling raw wetlands, doesn?t have the level of environmental impact it would otherwise have. They?re using existing access roads to access the site.?
Susan Lee, a Mat-Su Borough planner, said the state supervised scrutiny of the proposed Linc Energy project and the borough reviewed the project to ensure it complied with coastal management policies.
The LEA #1 well will target conventional natural gas in the Middle and Lower Tyonek Formations as well as the Hemlock Formation. The well will be located less than two miles from the Enstar 20-inch natural gas pipeline.
The Linc Energy well site is situated more than four miles from the coast, according to a coastal project questionnaire and certification statement submitted by Linc Energy?s project manager Corri Feige. It is not expected to affect the nearest body of water, Goose Creek, which is about a half mile to the northeast of the anticipated project site.
The questionnaire also stated that the area surrounding the proposed well location is sparsely populated and that the drill rig to be used at the site is equipped with residential-grade mufflers to further reduce noise.
Dry drill cuttings will be permanently disposed of in the Mat-Su Central Landfill and fluids ? including any produced water ? will be disposed of by a commercial disposal service or through an annular injection permit from the Alaska Oil and Gas Conservation Commission.
An archaelogist surveyed the proposed drilling site in June to ensure construction would not affect or damage historical or cultural resources in the area. A report of the survey findings was filed with the State Historic Preservation Office and the Mat-Su Borough?s historical preservation office in July.
All water required for the drilling process, the questionnaire stated, will come from either a pre-existing water well at the site or purchased and transported to the location.
The well will be drilled to an approximate bottom hole depth of 7,000 feet.
?The well will be lined with steel drill casing and cemented to approximately 1,500 feet, well below zones used for drinking water. Only water-based drilling fluids will be used, deploying standard drilling industry practices.?
Temporary drilling activities at LEA No.1 are expected to last three to four weeks and equipment will be removed after drilling has ended. If the company discovers natural gas at the site, it could later proceed with getting authorization to drill a delineation well and continue exploration. If the results of the initial drilling prove to be disappointing, the company would plug and abandon the well.
Initial drilling is expected to continue through December. Additional well testing or planning for additional wells is slated for January through March 2011, if required.
Advance prospect exploration ? selection and permitting of additional wells and related tasks ? could take place between April 2011 and January 2012.
?Discovery of a natural gas resource would meet both the local community and broader community needs in South-Central Alaska,? the questionnaire stated. ?...drilling techniques that allow for multiple wells to be drilled from a single location would be considered in the future, if appropriate for development and geologic realities.?
http://www.frontiersman.com/articles/2010/09/26/local_news/doc4c9eecc1a8dea311995611.txt
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some news that may be of interest:
GVK Power & Infrastructure (GVKP.BO) is scouting for coal and gas assets overseas for $200 million to $1 billion to fire its power projects in India, the company's vice chairman said on Tuesday.
http://www.reuters.com/article/idUSTRE68R1M420100928
ICVL: We have put non-binding bids for a couple of overseas mines and are conducting due diligence on these as
http://economictimes.indiatimes.com...k-Indonesia-Australia/articleshow/6588593.cms
Adani says $6.5b coalmine will be country's biggest Mathew Murphy
September 29, 2010
http://www.smh.com.au/business/adani-says-65b-coalmine-will-be-countrys-biggest-20100928-15vta.html
ADANI GROUP of India says its $6.5 billion mine, rail and port project in Queensland will produce up to 60 million tonnes of coal a year at its peak and create the country's biggest coalmine.
In an interview with BusinessDay, Harsh Mishra, the president of corporate planning, said Adani had made the single largest investment by an Indian company in Australia and planned on continuing to invest over the long term.
Last month, Adani bought Linc Energy's coal tenements in the Galilee Basin in a deal worth up to $3 billion under which Linc received $500 million in cash and a $2-a-tonne royalty for the first 20 years of coal production. That could prove to be a clever deal for Linc, given the tenement has a resource base of 7.8 billion tonnes of coal.
''We have big plans in Australia and we are definitely going to be here over the long term,'' Mr Mishra said.
''Power generation is driving growth in India, which is linked to the GDP growth. So if you are expecting a 8.5 to 9 per cent growth rate over the next five years then a lot of that directly affects the demand for power. Thermal power generating capacity is due to double in the next 10 years and that coal will have to come from somewhere.''
Mr Mishra said Adani had rented office space in Brisbane to house up to 70 staff and had begun work on an environmental impact statement (EIS) and a drilling program. ''We expect that EIS to be completed in the next 14 months,'' he said.
''We think the mine will be a mixture of open pit and underground and would not only be the largest producing mine in Australia, it would be one of the largest in the world.''
Mr Mishra said Adani would use most of the coal to feed its power plants in India, of which 13,700 megawatts are already under construction and a further 6300 megawatts will be built by 2020.
''We plan to take pretty much of all [the coal] so we don't run the risk of non-feasibility of a project like some other miners that are reliant on third-party sales,'' he said.
Adani imported 55 per cent of India's thermal coal last year, 25 million tonnes, and to expects lift that to 35 million tonnes this year.
It expects to hire up to 5000 people during construction of the Galilee project and 4000 when it hits peak capacity, expected to be about 2022.
Mr Mishra said he planned to talk to the Queensland government about whether Adani would export from Abbot Point or its own port at Dudgeon Point.
Australia - Indian group target cattle station 29 Sep 2010
http://www.meattradenewsdaily.co.uk/news/290910/australia___indian_group_target_cattle_station_.aspx
INDIAN conglomerate Adani Enterprises is homing in on Graeme Acton's prize Central Queensland grazing property Moray Downs.
The group, whose business portfolio covers everything from gas exploration to real estate and edible oil, recently bought a coal tenement from listed mining group Linc Energy in Central Queensland for $500 million.It was regarded as the largest single investment by an Indian company in Australia. The Australian Financial Review has learned that Adani is now looking to buy the land where its new mining tenement lies.
According to Queensland government publicly available resource and tenure maps, the tenement sits on the Moray Downs property, about 170 kilometres north-west of Clermont. The purchase could fetch more than $50 million for the landowner who, with his brother Evan Acton, is estimated in the latest BRW Rich List to be worth $241 million.
A deal would also draw attention to a growing trend where foreign companies buy not only the mining tenement licences but also the land underneath to help smooth exploration and development of the area
Cheers,
Jonathan
GVK Power & Infrastructure (GVKP.BO) is scouting for coal and gas assets overseas for $200 million to $1 billion to fire its power projects in India, the company's vice chairman said on Tuesday.
http://www.reuters.com/article/idUSTRE68R1M420100928
ICVL: We have put non-binding bids for a couple of overseas mines and are conducting due diligence on these as
http://economictimes.indiatimes.com...k-Indonesia-Australia/articleshow/6588593.cms
Adani says $6.5b coalmine will be country's biggest Mathew Murphy
September 29, 2010
http://www.smh.com.au/business/adani-says-65b-coalmine-will-be-countrys-biggest-20100928-15vta.html
ADANI GROUP of India says its $6.5 billion mine, rail and port project in Queensland will produce up to 60 million tonnes of coal a year at its peak and create the country's biggest coalmine.
In an interview with BusinessDay, Harsh Mishra, the president of corporate planning, said Adani had made the single largest investment by an Indian company in Australia and planned on continuing to invest over the long term.
Last month, Adani bought Linc Energy's coal tenements in the Galilee Basin in a deal worth up to $3 billion under which Linc received $500 million in cash and a $2-a-tonne royalty for the first 20 years of coal production. That could prove to be a clever deal for Linc, given the tenement has a resource base of 7.8 billion tonnes of coal.
''We have big plans in Australia and we are definitely going to be here over the long term,'' Mr Mishra said.
''Power generation is driving growth in India, which is linked to the GDP growth. So if you are expecting a 8.5 to 9 per cent growth rate over the next five years then a lot of that directly affects the demand for power. Thermal power generating capacity is due to double in the next 10 years and that coal will have to come from somewhere.''
Mr Mishra said Adani had rented office space in Brisbane to house up to 70 staff and had begun work on an environmental impact statement (EIS) and a drilling program. ''We expect that EIS to be completed in the next 14 months,'' he said.
''We think the mine will be a mixture of open pit and underground and would not only be the largest producing mine in Australia, it would be one of the largest in the world.''
Mr Mishra said Adani would use most of the coal to feed its power plants in India, of which 13,700 megawatts are already under construction and a further 6300 megawatts will be built by 2020.
''We plan to take pretty much of all [the coal] so we don't run the risk of non-feasibility of a project like some other miners that are reliant on third-party sales,'' he said.
Adani imported 55 per cent of India's thermal coal last year, 25 million tonnes, and to expects lift that to 35 million tonnes this year.
It expects to hire up to 5000 people during construction of the Galilee project and 4000 when it hits peak capacity, expected to be about 2022.
Mr Mishra said he planned to talk to the Queensland government about whether Adani would export from Abbot Point or its own port at Dudgeon Point.
Australia - Indian group target cattle station 29 Sep 2010
http://www.meattradenewsdaily.co.uk/news/290910/australia___indian_group_target_cattle_station_.aspx
INDIAN conglomerate Adani Enterprises is homing in on Graeme Acton's prize Central Queensland grazing property Moray Downs.
The group, whose business portfolio covers everything from gas exploration to real estate and edible oil, recently bought a coal tenement from listed mining group Linc Energy in Central Queensland for $500 million.It was regarded as the largest single investment by an Indian company in Australia. The Australian Financial Review has learned that Adani is now looking to buy the land where its new mining tenement lies.
According to Queensland government publicly available resource and tenure maps, the tenement sits on the Moray Downs property, about 170 kilometres north-west of Clermont. The purchase could fetch more than $50 million for the landowner who, with his brother Evan Acton, is estimated in the latest BRW Rich List to be worth $241 million.
A deal would also draw attention to a growing trend where foreign companies buy not only the mining tenement licences but also the land underneath to help smooth exploration and development of the area
Cheers,
Jonathan
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Good stories Jonathan. Certainly underline how serious and how BIG Adani is. Looks as if the Gailee mine will be a cornerstone of Indian power production. LNC scoring $100m a year(indexed) royalties for 20 years looks better and better.
The first story also suggests that the other coal sales should do well - and hopefully soon.
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I am still really surprised that there is no sustained institutional buying pressure on LNC. Just can't see the downside at the present price and the coal sales alone would cover the current value of the company.
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Good stories Jonathan. Certainly underline how serious and how BIG Adani is. Looks as if the Gailee mine will be a cornerstone of Indian power production. LNC scoring $100m a year(indexed) royalties for 20 years looks better and better.
The first story also suggests that the other coal sales should do well - and hopefully soon.
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I am still really surprised that there is no sustained institutional buying pressure on LNC. Just can't see the downside at the present price and the coal sales alone would cover the current value of the company.
I am very interested in why Adani has not replicated its offer for the next parcel. they are factoring a rise in energy needs of GDP growth but i think India's growth is not quiet so linear.
an interesting October methinks
Interesting story in Courier Mail today regarding the Coal Seam Gas industry-
Queensland gas bonanza 'in peril' over water row
SENIOR Coalition frontbencher Ian Macfarlane has told one of the world's biggest resource companies that the coal seam gas industry was finished in Queensland if it did not resolve its issues over water.
While Tara's blockies were claiming they had scared off drilling in their area, west of Brisbane, through their blockades and protests, environmentalists also warned businesses last night that they could be affected by a campaign of non-violent civil disobedience to stop work in the Surat Basin gas fields.
But to counter the campaign, BG-owned Queensland Gas revealed it had budgeted to spend about $1 billion on treating the ground water from deep aquifers and returning it to the system for use by farmers and towns.
Mr Macfarlane said he had warned the industry that it had to get it right.
''I don't think there's any middle ground on it,'' he said. ''I've been telling them for 18 months they needed to get this sorted. ......
http://www.couriermail.com.au/busin...l-over-water-row/story-e6freqmx-1225932027370
Hopefully the Qld State Government will now reconsider their decision to give priority to the CSG industry over the UCG industry. At the very least, they could take the handbrakes off the approval of commercial operations for UCG while still insisting on full environmental scrutiny.
However I won't be holding my breath.
Queensland gas bonanza 'in peril' over water row
SENIOR Coalition frontbencher Ian Macfarlane has told one of the world's biggest resource companies that the coal seam gas industry was finished in Queensland if it did not resolve its issues over water.
While Tara's blockies were claiming they had scared off drilling in their area, west of Brisbane, through their blockades and protests, environmentalists also warned businesses last night that they could be affected by a campaign of non-violent civil disobedience to stop work in the Surat Basin gas fields.
But to counter the campaign, BG-owned Queensland Gas revealed it had budgeted to spend about $1 billion on treating the ground water from deep aquifers and returning it to the system for use by farmers and towns.
Mr Macfarlane said he had warned the industry that it had to get it right.
''I don't think there's any middle ground on it,'' he said. ''I've been telling them for 18 months they needed to get this sorted. ......
http://www.couriermail.com.au/busin...l-over-water-row/story-e6freqmx-1225932027370
Hopefully the Qld State Government will now reconsider their decision to give priority to the CSG industry over the UCG industry. At the very least, they could take the handbrakes off the approval of commercial operations for UCG while still insisting on full environmental scrutiny.
However I won't be holding my breath.
An interesting article on Adani's Galilee plans that expands on previous articles-
Adani to spend $4 bn on Aussie mine
Arijit Barman / Mumbai September 30, 2010, 0:32 IST
Aims to develop mine, rail-port infrastructure for evacuation of coal.
After completing its big-ticket acquisition of an Australian coal asset from Linc Energy, Adani Enterprises will now make an additional investment of $3.5-4 billion (Rs 15,700-18,000 crore) to develop the necessary mining infrastructure and logistics, including a rail link and a coal terminal in a port facility. This combined investment of over A$6.5 billion (over Rs 28,000 crore) will make it the largest coal sector investment in Australia.
In August, Adani – India’s biggest coal importer – agreed to pay $2.7 billion (Rs 12,500 crore) in a cash and royalty deal for the coal asset in the Galilee Basin of Queensland, Australia, which has one of the largest high-grade thermal coal deposits, at 7.8 billion tonnes.
To begin with, there will be open-cast mining. But, eventually, the mining will go underground. On an average, for a 30-million-tonne per year extraction, the mining development cost is typically around $1.5 billion (over Rs 6,700 crore). Adani will start at that level, but will ramp it up to 50 million tonnes a year. So, that should be a $2.2-billion (nearly Rs 10,000-crore) capex, according to officials involved in the process.
“It would not only be the largest producing mine in Australia, it would be one of the largest in the world,” said Harsh Mishra, president (corporate planning), Adani Group in Australia.
Adani's spokespersons, however, did not respond to Business Standard's queries about the company's evacuation plans.
Challenging task
Logistics will be a critical challenge. Adani’s Galilee tenement is about 100 km north of Alpha in central Queensland. But, at the moment, there is no infrastructure connecting the Galilee Basin to a port.
The test that Adani’s team faces is that cheaper rail routes are all linked to coal terminals in ports which are fully occupied. So, expanding the existing port facility is one option and Adani is indeed following that seriously, but so are other miners. Or else, Adani will have to invest in the longer rail routes, either alone or in consortia.
From Queensland, there are five port options ”” Brisbane, Maryborough, Gladstonne, Hay Point and Abbott Point. But for Adani, to ship coal out from Australia, the last two choices are the best bet.
Adani has received permission from the local port authority to do a feasibility study to construct its own port and coal terminal at Dudgeon Point, as part of an expansion programme of the port of Hay Point. It will have to spend over $600 million (nearly Rs 2,700 crore) on a coal terminal alone that can handle their load factor.
There’s competition, too
This proposed site is very near to Dalrymple Bay Coal Terminal (DBCT) and Hay Point, being run by BHP Billiton and Mitsubishi together as captive terminals. But both BHP and DBCT have also shown interest in additional coal terminals as they need excess terminal capacity for their operations. Their current captive terminals are fast reaching their peak as BHP is increasing annual production.
If Adani does finally get selected, then it will be a cheaper and easier logistical route and they will only need to invest in a 150-km stretch to Clairmont from their mine site where they is no rail linkage today. From that point onwards till the port, there are existing rail links used by others and only additional lines will need to be put in. The total combined investment will then come down, giving the Adanis considerable leg room.
The other option is the port of Abott Point, which has considerable excess capacity to handle the extra load. But to access that, a 500-km railroad needs to be built at an estimated cost of $3 billion (nearly Rs 13,500 crore).
Adani plans to mine around 52-60 million tonnes of coal every year to bring it to India and use some for trading, with operations beginning in 2014.
While Adani would only pay A$500 million (Rs 2,100 crore) as an upfront cash payment, the rest is payable as a A$2 (Rs 41.60) per tonne royalty for the first 20 years of production from the mine.
Instead of depending on one miner to foot the bill, the local authorities have asked some of the other big mining companies in the region, like Waratah Coal or Hancock, to form a joint venture SPV and co-invest in the rail road.
“Future of mining is in setting up the infrastructure. But Indian companies need to invest in competences in building mining related infrastructure like specialised railroads, storage facilities, ports and terminals. Also, we may have the hard tools, but softer elements are equally critical. Do we need to know the local environment, regulations, its people, politicians, just like the Chinese have done in Africa?” asked Prasad Baji, senior metals and mining analyst with Edelweiss.
http://www.business-standard.com/india/news/adani-to-spend-4-bnaussie-mine/409684/
Adani to spend $4 bn on Aussie mine
Arijit Barman / Mumbai September 30, 2010, 0:32 IST
Aims to develop mine, rail-port infrastructure for evacuation of coal.
After completing its big-ticket acquisition of an Australian coal asset from Linc Energy, Adani Enterprises will now make an additional investment of $3.5-4 billion (Rs 15,700-18,000 crore) to develop the necessary mining infrastructure and logistics, including a rail link and a coal terminal in a port facility. This combined investment of over A$6.5 billion (over Rs 28,000 crore) will make it the largest coal sector investment in Australia.
In August, Adani – India’s biggest coal importer – agreed to pay $2.7 billion (Rs 12,500 crore) in a cash and royalty deal for the coal asset in the Galilee Basin of Queensland, Australia, which has one of the largest high-grade thermal coal deposits, at 7.8 billion tonnes.
To begin with, there will be open-cast mining. But, eventually, the mining will go underground. On an average, for a 30-million-tonne per year extraction, the mining development cost is typically around $1.5 billion (over Rs 6,700 crore). Adani will start at that level, but will ramp it up to 50 million tonnes a year. So, that should be a $2.2-billion (nearly Rs 10,000-crore) capex, according to officials involved in the process.
“It would not only be the largest producing mine in Australia, it would be one of the largest in the world,” said Harsh Mishra, president (corporate planning), Adani Group in Australia.
Adani's spokespersons, however, did not respond to Business Standard's queries about the company's evacuation plans.
Challenging task
Logistics will be a critical challenge. Adani’s Galilee tenement is about 100 km north of Alpha in central Queensland. But, at the moment, there is no infrastructure connecting the Galilee Basin to a port.
The test that Adani’s team faces is that cheaper rail routes are all linked to coal terminals in ports which are fully occupied. So, expanding the existing port facility is one option and Adani is indeed following that seriously, but so are other miners. Or else, Adani will have to invest in the longer rail routes, either alone or in consortia.
From Queensland, there are five port options ”” Brisbane, Maryborough, Gladstonne, Hay Point and Abbott Point. But for Adani, to ship coal out from Australia, the last two choices are the best bet.
Adani has received permission from the local port authority to do a feasibility study to construct its own port and coal terminal at Dudgeon Point, as part of an expansion programme of the port of Hay Point. It will have to spend over $600 million (nearly Rs 2,700 crore) on a coal terminal alone that can handle their load factor.
There’s competition, too
This proposed site is very near to Dalrymple Bay Coal Terminal (DBCT) and Hay Point, being run by BHP Billiton and Mitsubishi together as captive terminals. But both BHP and DBCT have also shown interest in additional coal terminals as they need excess terminal capacity for their operations. Their current captive terminals are fast reaching their peak as BHP is increasing annual production.
If Adani does finally get selected, then it will be a cheaper and easier logistical route and they will only need to invest in a 150-km stretch to Clairmont from their mine site where they is no rail linkage today. From that point onwards till the port, there are existing rail links used by others and only additional lines will need to be put in. The total combined investment will then come down, giving the Adanis considerable leg room.
The other option is the port of Abott Point, which has considerable excess capacity to handle the extra load. But to access that, a 500-km railroad needs to be built at an estimated cost of $3 billion (nearly Rs 13,500 crore).
Adani plans to mine around 52-60 million tonnes of coal every year to bring it to India and use some for trading, with operations beginning in 2014.
While Adani would only pay A$500 million (Rs 2,100 crore) as an upfront cash payment, the rest is payable as a A$2 (Rs 41.60) per tonne royalty for the first 20 years of production from the mine.
Instead of depending on one miner to foot the bill, the local authorities have asked some of the other big mining companies in the region, like Waratah Coal or Hancock, to form a joint venture SPV and co-invest in the rail road.
“Future of mining is in setting up the infrastructure. But Indian companies need to invest in competences in building mining related infrastructure like specialised railroads, storage facilities, ports and terminals. Also, we may have the hard tools, but softer elements are equally critical. Do we need to know the local environment, regulations, its people, politicians, just like the Chinese have done in Africa?” asked Prasad Baji, senior metals and mining analyst with Edelweiss.
http://www.business-standard.com/india/news/adani-to-spend-4-bnaussie-mine/409684/
