India's Adani aims to start digging Australia mine in 2013

MELBOURNE (Reuters) - India’s Adani Enterprises aims to start building its first Australian coal mine in July 2013, at an expected cost of around $4 billion, so it can produce 23 million metric tons (25.4 million tons)a year in its first year, its Australian chief said on Monday.

Adani expects to complete a bankable feasibility study for the Carmichael mine by the end of this year, and does not see lining up financing as too challenging in the current environment, said Adani Group’s Australia chief executive Harsh Mishra.

“Expressions of interest we’ve got so far are predicated on the successful track record that Adani has demonstrated in India from banks that have traditionally supported us on our projects,” Mishra told Reuters by phone from Brisbane.

Adani has been approached by pension funds and private equity investors interested in buying minority stakes in the Carmichael project, Mishra said, the company has not held detailed discussions with them.

Exports from the mine hinge on building a railway line, estimated at $6 billion according to the company’s application to the government, although Adani Mining’s web site puts the rail cost at $2 billion.

Adani and Australian rail operator QR National said on Monday they plan to work together to study building rail lines from Adani’s Queensland coal project to two ports on the Pacific coast, including a new 500 km (311 miles) line. They expect to complete the study by March 2013, Mishra said.

The company expects most of the targeted 60 million metric tons a year - which it aims to produce by 2020 - from Carmichael to be exported through Adani’s Abbot Point port, with some going through Dudgeon Point, further south.

QR National and Adani both won approval from the Queensland state government for separate rail routes last month, and have agreed to run a feasibility study looking at infrastructure to handle 60-80 million tonnes a year from Adani’s mine in the Galilee Basin.

Rail lines are the main hurdle to the development of the untapped Galilee Basin, a region where five major mines, including a project run by rival Indian firm GVK Power & Infrastructure, could produce more than 200 million tonnes of coal a year.

Reporting by Sonali Paul; Editing by Daniel Magnowski