November 6, 2017 Read More →

Adani Seeks China Funding for $13bn Mine in Australia

Financial Times:

Adani Group has turned to China to help fund a vast coal mine in Australia, holding talks with a big state-owned enterprise and enlisting Canberra’s support to market the project.

The Indian conglomerate approved construction of the A$16.5bn (US$12.7bn) coal mine in June but is struggling to fund the railway, coal and port development — in a project that has become a litmus test for global investors’ appetite for thermal coal. 

Executives from Adani and Downer Group, a partner on the Carmichael coal project, met Zhang Chun, president of China Machinery Engineering Corporation (CMEC) earlier this year, according to CMEC’s website. 

“CMEC is willing to co-operate with Adani to take part in the development and construction of new-energy (such as wind power) projects in Australia as well as traditional and new-energy projects in India,” CMEC said in a statement at the time.

It is not known how far the talks with CMEC have progressed but last week the Australian government confirmed it had written to the Chinese government in an attempt to dispel alleged “misinformation” spread by environmental activists about the project.

Tim Buckley, a director at the Institute for Energy Economics and Financial Analysis, which opposes the mine, said Adani’s talks with CMEC were important as a deal could potentially provide the company with access to Chinese banks and the country’s export credit agencies.

“I think China is the last bastion for Adani in terms of funding but it is definitely not agreed yet,” he said.

Mr Buckley said Chinese investors would have to weigh up not only the financial risks but also the extent of local opposition and the potential for a change in Australia’s political landscape.

Adani has applied for a A$900m ($695m) government grant to help it finance a railway to transport the coal to its port near the Great Barrier Reef marine park. A decision is pending on the application, which has been criticised by opponents of the Adani project.

Adani seeks China funding for $13bn mine in Australia

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