Linc Energy Ltd
(ASX:LNC) has agreed to sell its Galilee coal project to India's Adani Enterprises in a cash and royalty deal worth $3 billion.
It’s the largest single mine investment by an Indian firm in Australia and could trigger more Indian investments as the power hungry nation forecasts an acute coal shortage within a decade.
To put that into perspective, about two-thirds of India's installed power capacity of around 162,000 megawatts is fuelled by thermal coal sources.
Linc's chief executive officer Peter Bond told Reuters that Linc will receive $500 million in cash and $2 per tonne in royalty payments for the first 20 years of coal production from the mine.
The deal with see the Galilee mine operational in four years and will be able to supply up to 20,000 megawatts of generating capacity to Adani Power.
Linc Energy Ltd (ASX:LNC) posted a $42 million loss in the year to June 2009.
