Adani Coal Project in Australia and benefits for India

India's Adani Group got approval for its US$16 billion coal mining project in Queensland of Australia. The Carmichael coal project is India's biggest private investment till date in the Asia-Pacific. With six open cut pits and around five mines, the project, spread over around 30,000 hectares of land area will be the biggest in Australia. Being located close to the ecologically fragile Great Barrier Reef, the project invited the ire of environmentalists for obvious reasons. It has eventually been sanctioned with a large number of strict environmental compliance conditions.

From a business perspective, the project opens up ample opportunities for integrating India deeper with the Asia-Pacific. As it begins exporting coal to India, India's supply shortage of good quality of coal will be reduced to a large extent. Soon after obtaining the project approval, the Adani Group bought the Lanco's thermal power plant in India, which has a capacity of more than 1,000 MW and uses Australian coal. The Carmichael project would therefore neatly fit into the regional value chain of the power industry with the upstream resources coming from Australia and the downstream electricity feeding into India's huge final demand market. The coal produced by the project is also expected to be used by other electricity producers in India, particularly the private sector, who have been relying more on Indonesia coal, given the larger passage of better quality Australian coal to China. Indeed, the project is likely to pave the way for more investment-driven manufacturing and service value chain opportunities for other investors from India. India's surplus refining capacities and lack of adequate raw material can see similar investments in Malaysia, Indonesia and Myanmar in future with crude oil and energy being imported back to India for processing and re-exporting to the region.