Adani Group

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The Adani Group is a diversified company in India with, according to its website, "interests in Infrastructure, Power, Global Trading, Logistics, Energy, Port & SEZ, Mining, Oil & Gas, Agri Business, FMCG products, Real Estate Development, Bunkering".[1] The firm earned $5.8bn in revenues in 2010.[2] The company is owned by Gautam Adani, India’s sixth-richest person with a fortune valued at $10 billion.[3]

Adani Power Limited is the power business arm of Adani Group, with head office at Ahmedabad, Gujarat. The company is India's 3rd largest private power producer with capacity of 1980MW.[4] On its website the company states that it "has entered the power sector to harbinger a ‘power full’ India, by generating 20,000 MW of power by 2020."[5]

December 2011: Projects placed on hold due to coal supply problems

In December 2011, Adani Power said that it was putting 6,500 MW of capacity expansion projects on hold due to coal supply uncertainties. The plants on hold include Pench Thermal Power Project in Madhya Pradesh, Bhadreshwar Thermal Power Project (Adani) in Gujarat, and Dahej Thermal Power Project in Gujarat.[6]

Power plants

Under construction

As of 2011, the Adani Group is currently constructing three power stations:[7]

  • Mundra Thermal Power Project - The Mundra Thermal Power Project was conceived for the captive consumption of the Mundra Port. Adani Power wants the plant at Mundra to be 4620 MW, consisting of 4 units of 330 MW and 5 units of 660 MW.[7] Adani states that the project, which has received funding from the Clean Development Mechanism for the 1320MW Phase III expansion because the two 600MW units use supercritical technology. The company states that the power station was "conceived for the captive consumption of the Mundra Port & SEZ."[7] The project is scheduled to be fully operational within the Five Year Plan (2007-2012).[8] As of 2011, 70% of the requirements at Mundra is met with imported coal.[9]
  • Tiroda Thermal Power Project - The plant of 3300 MW in the Tiroda, District Gondia, Maharashtra, India is being set up by Adani Power Maharashtra Ltd (APML), a subsidiary of Adani Power Limited. The company states that it expects the first 1960MW from Phase 1 & 2 to be commissioned by 2012, with the remainder within the 2012-2017 period.[7]
  • Kawai Thermal Power Project - The plant of 1320 MW in Kawai, District Baran, Rajasthan, India is being set up by Adani Power Rajasthan Limited, a subsidiary of Adani Power Limited. The project is scheduled to be commissioned in 2013.[7]

Proposed

As of 2011, the Adani Group is proposing the construction of three power stations:[7]

  • Pench Thermal Power Project - The proposed 1320 MW plant would be built in Chhindwara, District Chhindwara, Madhya Pradesh, India by Adani Pench Power Limited, a subsidiary of Adani Power Limited. The plant is proposed to be commissioned by 2013.
  • Dahej Thermal Power Project - Adani Power Dahej Limited, a subsidiary of Adani Power Limited, is implementing a plant at a coastal location, near the port of Dahej, in the industrial district of Bharuch in Gujarat. The thermal power project would have an aggregate capacity 2640 MW and is proposed to be commissioned by 2013. The plant is proposed to be located near Dahej Port.
  • Bhadreshwar Thermal Power Project - Kutchh Power Generation Limited, a subsidiary of Adani Power Limited, is implementing a plant near the port of Mundra, in district Kutchh in Gujarat with an aggregate capacity 3300 MW. The plant is proposed to be commissioned by 2014 and located near Mundra Port.

Adani's coal mining interests

Australia

In August 2010 Adani Mining, a subsidiary of Adani Group bought Linc Energy's Galilee coal tenement for $A500 million in cash plus a $2 per tonne royalty (indexed to the Consumer Price Index) for the first twenty years of coal production. According to Linc the Galilee tenement an indicated resource of 500 million tonnes and a further 7.3 billion tonnes as an inferred resources. The company claims that the "tenement is capable of producing up to 60 million tonnes of coal per year once fully operational."[10]

In August 2011, chief executive of Adani's Australian operations, Jignesh Derasari, declared the company wanted to control "whatever component the coal touches", including a US$3 billion dollar railway network to haul coal from the Galilee Basin in central Queensland to two ports. Adani bought one of the ports in May 2011 for $1.8 bn - the Abbot Point Coal Terminal - and the other Adani plans to build at Dudgeon Point near Mackay. From there, Adani-owned bulk carriers would ship the coal to India to fuel seven power stations operated by Adani. Adani is proposing two new train lines -- one running about 500km directly to Abbot Point and the other running due east from the company's holdings to the town of Moranbah in the Bowen Basin, where it will connect with the existing Queensland Rail coal network. Adani's Galilee Basin mine would start export operations to India in 2015, and continue through 2035. By 2020, it is forecast to be shipping 60 million tonnes of coal annually, about 15 per cent of total Australian coal exports by volume.[11]

India

Adani Enterprises has entered into a joint venture agreement with RRVUNL and formed a company called Parsa Kente Collieries with holding a 74% equity interest for mining coal from the Parsa East and Kante Basan coal blocks in Chhattisgarh. On its website ADanai states that it has also entered into a 30-year agreement to supply coal from the mines for RRVUNL's power stations commencing in June 2011. Adani Mining has a coal mining services agreement for "activities obtaining approvals (including approval of mining plan), acquisition of land, setting up washery and construction of railway siding at the mine."[12]

The company also states that Adani Enterprises "received a letter of intent (“LoI”) dated May 20, 2009 from Mahaguj Collieries Limited, for the development of the Machhakata coal block in Orissa. This entails the mining of coal from the coal block and supplying the designated power plants of Maharashtra Power Generation Company Limited and the Gujarat State Electricity Corporation Limited."[12]

The company also states that it has a letter of agreement dated October 20, 2009 from Chhattisgarh State Power Generation Company Limited "regarding selection as joint venture partner for development, mining and transportation of coal from Parsa coal block. In terms of the Chhattisgarh LOA, CSPGCL will hold 51% cashless equity in the joint venture company formed and the Company will hold 49% ... The coal from the mine will be utilized by CSPGCL for its own thermal power project."[12]

Indonesia

Adani has coal mining rights in the Bunyu Island in Indonesia.[13]

Ports

Adani Enterprises is India’s largest coal importer, and operator of the largest private port in India - Mundra Port. It became one of the first developers of private ports in India when the government first allowed the entry of private businesses in the late eighties.[1][2] According to the NY Times, Adani spent a decade assembling tracts of land into a special economic zone and helped transform Mundra Port into India’s biggest private port. Adani then used the port for a coal "global expansion." He acquired coal mining rights in Indonesia, bought two cargo ships (with two more on order), and bought a coal mine and Abbot Point port in Australia.[14]

In April 2011, Adani Enterprises agreed to buy Australia's Abbot Point Coal Terminal for A$1.83bn ($1.98bn). The purchase was among a number placed by Indian groups in Australia and elsewhere as the country to secure energy resources to meet rising demand for power to complete infrastructure projects in India.[15]

Power Plants Overseas

Adani Power has been shortlisted for four overseas projects that could have a total capacity of 3,792 MW. Successful bidders of these projects will be announced later in 2012.[16]

  • Kosovo in a bid to develop the new e Re Power Plant and refurbishing Sibovc South Mine
  • South Africa to develop a 600 MW coal-fired dry cooled Circulating Fluidised Bed-based technology power project along with mining group Exxaro
  • Nigeria participated and qualified for acquisition for two gas-based power projects, namely Ughelli Power Place and Sapele Power Place

Carbon credits

As of July 2011, five "high-efficiency" coal power plants were registered under the UN's Clean Development Mechanism -- four in India and one in China -- meaning they are all eligible to earn certified emissions reductions (CERs) that they can sell. The five registered power projects involve two from Reliance Power totalling 8,000 MW, two projects totalling 2,640 MW from Adani Power and a 2,000 MW ultra-supercritical plant by Shenergy in China. According to U.N. data, the five projects are eligible to receive a total of 68.2 million CERs over a 10-year crediting period. That is worth 661 million euros ($919 million) based on current prices of CERs traded on the European Climate Exchange of 9.70 euros.[17]

Contact details

Ahmedabad
"Adani House",
Near Mithakhali Six Roads,
Navrangpura,
Ahmedabad – 380 009
Tel: +91-79-26565555
Fax: +91-79-26565500
Website: http://www.adanigroup.com/

Articles and resources

References

  1. 1.0 1.1 Adanai Group, "Group Highlights", Adanai Group website, accessed May 2011.
  2. 2.0 2.1 Akanksha Awal, "India’s energy interests in Australia" Financial Times, May 4, 2011.
  3. Jim Yardley and Vikas Bajaj, "Billionaires’ Rise Aids India, and the Favor Is Returned", New York Times, July 26, 2011.
  4. "Adani power synchronizes country's 1st super critical unit", Economic Times, December 23, 2010.
  5. Adani, "Adani Power: Fuelling Dreams", Adani Power website, accessed November 2011.
  6. "Adani Power holds 6,500-Mw expansion," Business Standard, December 28, 2011
  7. 7.0 7.1 7.2 7.3 7.4 7.5 "Power Generation" Adani Power, accessed November 2011
  8. "Power Generation" Adani Power, accessed July 2011
  9. Neeraj Thakur, "Indonesian nightmare for Tata, Adani, JSW, Lanco" DNA, June 13, 2011.
  10. Linc Energy, "Linc Sella Galilee Coal Tenement for $3.0 billion", Media Release, August 3, 2010.
  11. Andrew Fraser, "From pit to port: India's $10bn coal export plan" The Australian National Affairs, August 20, 2011.
  12. 12.0 12.1 12.2 Adani Group, "Coal mining", Adani Group website, accessed July 2011.
  13. Jim Yardley and Vikas Bajaj, "Billionaires’ Rise Aids India, and the Favor Is Returned" NY Times, July 26, 2011.
  14. Jim Yardley and Vikas Bajaj, "Billionaires’ Rise Aids India, and the Favor Is Returned" NY Times, July 26, 2011.
  15. "Adani buys Australian coal port for $1.98bn" Peter Smith & James Fontanella-Kahn, Financial Times, May 3, 2011.
  16. ET PTI, "Adani Power shortlisted for four overseas projects" The Economic Times, accessed January, 10 2012.
  17. David Fogarty, "Carbon credits for India coal power plant stoke criticism" Reuters Africa, July 12, 2011.

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External resources

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