Adani bringing integrated logistics to giant coal project
Indian billionaire Gautam Adani believes integrated logistics are the key to competitive sourcing of coal from Australia for his six new coal-fired power stations.
Gautam Adani seeks scale economies through logistics integration
This has led to Adani Enterprises committing to invest $6.9bn – India’s largest investment in Australia – to developing its mine, rail and port project in its Galilee Basin coal mine in Queensland with eventual production of 60m tonnes a year.
The Adani Group will need to develop rail access to its proposed Dudgeon Point port facility near Mackay and will also use the Abbott Point coal terminal.
As the group's founder and executive chairman, Mr Adani joined Queensland premier Anna Bligh in Brisbane when she opened the $30bn group’s state office on Monday. Adani is involved in commodities trading, edible oil production, energy projects and India’s largest private port at Mundra.
Mr Adani outlined the group’s plan for first coal by the end of 2014 and its target of mining 200mtpa of coal, generating 20,000 mW of power and moving 200m tonnes of cargo through Adani ports by 2020.
"This [Queensland] investment is an important benchmark investment in low rank thermal coal assets, a segment that has previously been ignored for reasons of inadequate logistics," he said.
Mr Adani said global investors were starting to recognise the economic potential of large deposits supported by large-scale logistics solutions.
"This investment has unlocked the enormous potential of what were once unviable resources," he said.
"Our unique strengths lie in being able to integrate across the value chain, right from mining to rail and port logistics, shipping and finally to power generation. This insulates us from component market variations and expedites project implementation.”
Ms Bligh said the Galilee tenement, now being renamed as the Carmichael tenement, was set to become, at peak production, the largest operating coal mine in Australia, and one of the largest in the world.
Adani Enterprises has also entered into a $1.65bn deal with the Indonesian government and its mining company PT Bukit Asam for setting up rail and port infrastructure there to source coal to India.
