Adani wins Abbot Point Coal Terminal for A$1.8bn

Adani Enterprises submitted the winning bid for a 99-year lease of the Australian coal terminal, which serves as the gateway to Queensland's coal-rich Galilee Basin. Brookfield Infrastructure Partners, Macquarie, Cheung Kong and RREEF were among the rival bidders for the terminal.

Indian infrastructure conglomerate Adani Enterprises has lodged the winning A$1.8 billion (€1.3 billion; $2 billion) bid for the Abbot Point Coal Terminal, beating out competition from Brookfield Infrastructure Partners and other groups interested in a 99-year lease on the Queensland coal port.

Queensland Premier Anna Bligh said in a statement that the bid from Adani-subsidiary Mundra Port exceeded the government’s price expectations of A$1.5 billion. Funds from the lease will be dedicated to reconstruction efforts following floods and tornadoes that devastated Australia earlier this year, Bligh said.

Abbot Point is Australia’s northernmost coal port. The port typically handles over a million tonnes of cargo a month, with 16.6 million tonnes of coal exported in the last year, according to the port authority’s website. It is also strategically located near major coal producing regions in Australia, including the Bowen Basin and the Galilee Basin.

In a statement issued at the launch of the Abbot Point lease last October, Queensland Treasurer Andrew Fraser described the terminal as the “most accessible port for the, as yet, largely un-tapped Galilee Basin”, where Adani is developing a coal mine. Bligh said Adani's Galilee project, valued at A$6.5 billion, is a sign of the company's “willingness to invest in Queensland”.

The Abbot Point lease was part of A$15 billion in asset sales that the Queensland government proposed in 2009 in order to offset losses incurred during the recession without raising taxes. As part of the privatisation programme, Queensland leased the Port of Brisbane to a consortium comprised of Global Infrastructure Partners, Industry Funds Management, state-backed fund manager Queensland Investment Corporation, and a subsidiary of the Abu Dhabi Investment Authority. The winning consortium paid A$2.1 billion for the 99-year lease.

Other consortia interested in the Abbot Point lease included Toronto-based Brookfield Infrastructure Partners, which already owns the Dalrymple Bay coal terminal in Queensland, as well as Macquarie, Hong Kong-based Cheung Kong Infrastructure, RREEF Infrastructure, and Australian coal magnate Nathan Tinkler, according to local news reports.

Adani has coal mining operations in India, Indonesia and Australia, and is the largest importer of coal into India, according to its website.

Mundra, which operates a port in northern India, said in a statement to the Bombay Stock Exchange that the Abbot Point acquisition would more than double the company’s current balance sheet.

Mundra’s shares closed down 5 percent, at Rs.138 (€2.1; $3.1).