Adani Reaches Royalty Deal For It's $16.5 Billion Australian Coal Mine

Adani Enterprises Ltd., controlled by Indian billionaire Gautam Adani, said its Australian unit has reached an agreement on royalty payments with the Queensland government, ensuring the $16.5 billion Carmichael coal project moves forward. Shares surged.

The agreement with the state government “meets Adani’s expectations and requirements,” the company said in a statement, without providing details of the accord. The board will consider the final investment decision at its next board meeting. Adani Enterprises shares rose as much as 12 percent to 124.80 rupees, the biggest jump in more than a month, and traded at 117.80 rupees as of 1:55 p.m. in Mumbai.

The company last week deferred an investment decision on the project scheduled for May 29 after delays in reaching an agreement on royalty terms, which prompted federal resources minister Matthew Canavan to say it could walk away from the project if an accord is not reached. Later in the week, Queensland premier Annastacia Palaszczuk said the state’s cabinet had agreed that Adani “will pay every cent of royalties in full.”

“The royalties arrangement means the project is back on track to generate 10,000 direct and indirect jobs in regional Queensland,” Adani said in the statement.

The Carmichael coal project, Australia’s largest, has been delayed several times since first being proposed in 2010 due to protests and court claims from green groups concerned about its environmental impact. Westpac Banking Corp. barred lending for the project in April due to a new policy on coal emissions. (Bloomberg)