Adani Steps Up Effort For Australian Coal Project

Notwithstanding a sharp decline in coal prices, Adani Enterprises is going ahead with its plan to build Australia's biggest coal mine in the next three years. It has stepped up its effort in the wake of Prime Minister Narendra Modi’s Australia visit.

The state government of Queensland has said that Adani may announce the project when Prime Minister Modi visits the country next week.

However, according to experts, Adani might have taken the issue of raising funds for the $7-billion mine lightly. Experts believe that the target of opening a mine in 2017 is highly aggressive as there is no debt funding. Moreover, there is uncertainty over growth in demand for coal in India.

"On a standalone basis, the economics just don't stack up – I'm talking about costs and return on capital. You'd need a price of about $100-$110 a tonne for it to stack up," said Daniel Morgan, global commodities analyst at UBS.