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Until a couple of years ago, Adani Enterprises (AEL) had big plans for Indonesia – the single largest overseas sourcing point of coal for India. Sometime in the middle of the last decade they acquired their first overseas coal asset in the country, and until 2009 the group had multi-billion dollar plans to acquire more assets, as well as building rail and port facilities (to ensure speedy evacuation of coal to India) in the archipelago.
Two years down the line the company seems to have shelved its plans to step up activities in Indonesia. Instead, Adani is now more focussed on developing its vast Galilee Coal reserves in Australia — estimated to produce 60 million tonnes a year by 2020 — and is searching for new assets in African nations like the Mozambique.
Change of heart
The change of heart is evident even in the Adani Web site, which merely refers that the company's asset at East Kalimantan province in Indonesia has produced a little over one million tonnes of coal from its assets in the first full year of operation in 2009.
“AEL has clearly lost focus on Indonesia,” a source told Business Line, blaming the recent restrictions imposed by the Indonesian Government as a major dampener. The company's proposal to build dedicated rail-port connectivity has reportedly yet to be approved by the Indonesian government.
Adani sources though deny that the company has shelved its expansion plans in the country, and cite non-availability of ‘quality resources' in Indonesia.
Focus Australia
On the contrary, there is a clear enthusiasm at the Adani camp on its Australian venture. Officially, the company's Galilee mining project, which is expected to be on stream beginning 2014-15, will produce as much as 60 mtpa by 2020. Company sources, however, feel that the project is capable of producing up to 100 mtpa.
Adani Enterprises had already committed to an investment over $6 billion in developing the mine as well as associated rail and port infrastructure at Port Abott point. An additional $6 billion is expected to flow in to develop the terminal facilities at Port of Hay. The company has just received 190 ha of land to build the Port of Hay facilities.
Destination Africa
Though the company has been importing an increasing number of cargo from Russia, sources suggest that Adani Enterprises is not planning any asset acquisition in Russia at this juncture. “The future destination is Russia,” a source added.
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