India's Adani seeks partners for $2 bln Australia rail line
India's Adani Enterprises will look for partners to help fund a $2 billion coal rail line from Australia's Galilee Basin to the Pacific Ocean, it said on Thursday, after winning state approval for its proposed route, Reuters reports.
The approval is crucial to Adani's $10 billion coal and rail project and potentially other projects in the untapped Galilee Basin, where five major mines could produce more than 200 million tonnes of coal a year.
The biggest hurdle to the Galilee Basin projects is affordable access to port, as the region is much further from the coast than Queensland's other coal-rich basins.
"We are eager to cooperate with third parties in such development but also keep open the option of going it alone as deemed in our best business interests," Adani Group Australia Chief Executive Harsh Mishra said in a statement.
At current prices for thermal coal, analysts question whether the Galilee Basin mines would be economically feasible, which could make it tough for companies like Adani to raise funding for their projects.
Thermal coal prices have shed 20 percent this year to a near two-year low of $92 a tonne at the Australian port of Newcastle, based on globalCOAL's index.
Adani declined to name potential partners. Others working on projects in the same region as its Carmichael project are Brazil's Vale and privately owned Chinese company Macmines Austasia.
Australian coal rail operator QR National and Adani proposed projects along the same corridor and may end up working together on a route to ship coal to an existing QR National rail line that could take coal to the port of Hay Point or Abbot Point further north.
That would be cheaper to build than a brand new 500 km rail line planned by India's GVK Power and Infrastructure for its $10 billion Alpha coal, rail and port project, on a route to Abbot Point that also won approval from the state of Queensland this week.
QR National is already in talks with Vale to ship coal from its Degulla project.