* Linc sells rights amid delays in huge Carmichael project
* Win-win deal frees Adani of liability, gives Linc cash
* CEOs may see 25-30 pct chance of mine opening -analysts
(Adds comments from Adani statement)
MELBOURNE/SINGAPORE, Aug 28 India's Adani
Enterprises has agreed to pay A$155 million ($145 million) to
Linc Energy to buy out the Australian firm's rights to
future royalties from Adani's huge but delayed Carmichael coal
project, already four years behind schedule.
The deal comes amid growing questions on whether Adani will
eventually go ahead with a project to build what would become
Australia's biggest coal mine, amid opposition from green groups
and a slump in coal prices to five-year lows.
A final decision to go ahead with the project, in
Northeastern Australia, would mean spending A$16.5 billion to
dig the mine, build a rail line and a port.
"This agreement reflects Adani's confidence in the progress
of Carmichael mine, which received final federal environmental
approvals from the Australian government last month," Adani said
in a statement emailed to Reuters. "The agreement...underlines
Adani's consistent commitment to ensure that the high-quality
coal from the Carmichael mine is cost-efficient."
The agreement announced by Singapore-listed Linc on Thursday
means Linc is walking away from a A$2 per tonne royalty, indexed
to inflation, on the first 20 years of production from the coal
mine. Adani bought Carmichael from Linc Energy amid a coal boom
in 2010, paying A$500 million in cash upfront and agreeing to
pay the royalty stream.
In 2010, Adani said it aimed to open the mine by 2014 and at
the time Linc said it could earn more than A$3 billion in
revenue over the life of the royalty stream.
Linc chief executive Peter Bond said the two companies
agreed on the A$155 million price tag based on the risks of the
current weak coal price and "all the other risks of the coal
industry at the moment".
"I actually have a lot of confidence that Adani will get the
pit going," Bond told Reuters by phone from Brisbane. "It's more
about us focusing our strategy into cashing up the balance sheet
and driving towards a more focused outcome like drilling our
shale in South Australia."
Analysts said the agreement was a win-win deal for both
Adani and Linc, as the Indian firm gets rid of a liability on
the project, while Linc secures cash up front from a mine that
may not be built for many years.
Two analysts said the sum Adani is paying compared with the
net present value of the royalty stream, which they estimated at
A$600 million, implied Adani and Linc had put a 25 percent to 30
percent probability on the Carmichael project going ahead.
"It means they (Adani) haven't given up," said Tim Buckley,
a director of the U.S.-based Institute of Energy Economics and
Financial Analysis, which is campaigning against fossil fuels.
(1 US dollar = 1.0708 Australian dollar)
(Reporting by Sonali Paul in MELBOURNE and Rachel Armstrong in
SINGAPORE; Editing by Edwina Gibbs and Kenneth Maxwell)