Adani Enterprises surges 6% as it gives nod to Australia coalmine project

Shares of Adani Enterprises rallied over 6% after the company gave final investment approval for its controversial $4 billion Carmichael mine and rail project in Queensland.

The stock surged as much as 6.6% to Rs 125 on the BSE. So far, 20 lakh shares of the company exchanged hands on the counter against its two-week average of 16 lakh shares. 

The stock outperformed the market over the past one month by rising 3.8% compared with nearly 5% rise in the Sensex. The scrip also outperformed the market in the past one quarter, rising 20.17% against nearly 8% rise in Sensex. In the past one year, the scrip rallied 63.2% against just 17% gains in Sensex. 

“The project has Final Investment Decision approval, which marks the official start of one of the largest single infrastructure and job-creating developments in Australia’s recent history,” Adani Chairman Gautam Adani said in a statement.

The company, which has still to line up funding, plans to build what would be Australia’s biggest coal mine, but has faced opposition from environment groups who argue it will contribute to global warming and damage the Great Barrier Reef.

On Tuesday, Adani said the project would create 10,000 direct and indirect jobs, with pre-construction works starting in the next few months. Coal from the mine will be exported to India.

The Carmichael project is located in the remote Galilee Basin, a 247,000 square-kilometre (95,000 square mile) expanse in the central outback that some believe has the potential to become Australia’s largest coal-producing region.

“We have been challenged by activists in the courts, in inner city streets, and even outside banks that have not even been approached to finance the project,” Adani said, calling the project the biggest single investment by an Indian company in Australia.

Queensland premier Annastacia Palaszczuk said Australia’s third biggest state had been hit by a resources downturn which has hit mining firms across the country.

Adani’s final decision “is a vote of confidence not just in the Queensland economy, but in Queensland people”, she said.

(With inputs from agencies)