Adani buys Carmichael Mine royalty rights for $A155 million from Linc Energy
$A155 million cash deal brings Adani Carmichael Mine one step closer
The Indian power and energy conglomerate Adani Group has once again confirmed it is serious about the gigantic Queensland mine development at the Carmichael mine in the Galilee Basin.
Linc Energy Ltd is reportedly selling the royalty rights to the Carmichael Mine to Adani Group, for about $A155 million in cash.
According to the announcement, the parties will enter into a Deed of Assignment and Assumption which means over time the rights and obligations of Linc Energy will be transferred to Adani.
Adani will pay the initial payment up front then pay the remaining $A65 million balance within a year of signing of the Deed of Assignment and Assumption.
Linc Energy had sold the Carmichael coal mine tenement to Adani Mining Pty Ltd back in August 2010 for $A500 million. When that agreement was signed, Adani agreed to pay Linc Energy a royalty of $2 per tonne for the first 20 years of coal mining production at the Carmichael mine.
When will Adani start mining at the Carmichael Mine?
The big question is, when will the project actually begin? After years of planning and many hurdles to jump over, the Queensland government and also the Federal government has approved the project, but not without strict environmental conditions being laid down.
Developing the new coal mine will be a slow process, however the Adani Carmichael mine expects to start coal production at some stage in 2017. The coal seams lie close to the surface, meaning the pre-strip process will not be a long as most other mines in the adjacent Bowen Basin.
According to a Linc Energy report, Adani is looking to crank up to full production rates of some 60 million tonnes per year by 2023.
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