Adani to complete Abbot Point acquisition by June

The Adani Group is expected to complete the Abbot Point port deal by June 2011. The company would have a long term-lease of the port premises for a period of 99 years.

The group will acquire shares from State of Queensland to complete the transaction. “Adjustments of payments to State of Queensland will be made through shares and leasing cost,” said Aakansha Joshi, associate manager, Economic Laws Practice.

Adani's Mundra Port and Special Economic Zone (MPSEZ) announced the acquisition of Abbot Point Port in Australia for A$1.8 billion (Rs 9,000 crore) earlier this week. The port would handle both captive and non-captive coal.

The port terminal is operated by Abbot Point Bulk Coal Pty Ltd, a subsidiary of Xstrata Coal Queensland Pty Ltd. The Queensland government would grant the lease of the X50 Abbot Point Coal Terminal to Mundra Port Pty Ltd. Under the lease, the state authority would retain the ownership of the port land and fixed infrastructure like the jetty and the wharf. The state would also continue to facilitate private-sector funded expansion of export infrastructure within the broader port precincts such as Terminal 2, Terminal 3 and the multi cargo facility.

The North Queensland Bulk Ports Corporation would remain the port authority for Abbot Point and would be responsible for the safety, security, efficiency and planning for the port.

The port has two mechanised berths. MPSEZ aims to build another two in the next five years. The coal terminal has two berths which are capable of handling cape size vessel over 2 lakh tonnes deadweight. The port has a capacity of 50 million tonnes but currently uses only 20 million tonnes. Abbot Point port is an operational, fully-mechanised port with ship loaders, stacker reclaimers, conveyor and rail systems. The port also can also raise capacity to 80 million metric tonnes.

In August 2010, Adani had bought coal assets from Linc Energy Ltd for A$3 billion in cash and royalties, the largest acquisition by an Indian company in Australia. The company is targeting its first coal output by the end of 2014 and production of 50-60 million tonnes by 2022.

The Mundra port handles over 50 million tonnes of cargo, and MPSEZ aims to raise the figure to 200 Mmpta by 2020. Adani Group Chairman, Gautam Adani, said, “We have harboured aspirations to expand globally and were in search of the right business opportunity, with a strategic fit. Abbot Point is our contribution to India's increasing global ambition and would boost synergy with other business of the group.”

MPSEZ operates ports at Mundra and Dahej. Currently, it is developing ports at Hazira and coal terminals at Mormugao.