A Sydney-based good friend of mine provided me the news that a Hyderabad-based Indian Energy and Infrastructure giant, Lanco, has acquired Griffin’s coal mines for about $850 million a couple of days ago, after beating other bidders including Chinese. This is the biggest investment by an Indian company in Australia so far. This beats Adani Group’s investment of $500m on Linc Energy’s Galilee coal tenements in Queensland in August 2010.
I am very happy with this development because I want to see some serious investment by Indians in Australia and Australians in India. I want to see very deep relations between India and Australia. These relations need to be financial, political and strategic.
Lanco is a great business and its chairman Mr Lagadapati Madhusudan Rao is a respected business leader in India. They are a significant player in the Energy and Infrastructure sector in India. With what they are going to do in Western Australia where Griffin is based, Lanco will be a significant player in that state’s economy.
Lanco will be developing a Port and rail facilities in Banbury in South Western region of WA which will help them in linking Coal mines in Collie to Bunburry. They will guarantee jobs of about 400 people who are working with Griffin. Lanco has outlined their plan to triple if not more, the output of coal within a short term. They want to go from the current 4 million tonnes output to 15 million tonnes which will obviously provide employment to many more Western Australians. Griffin’s Administrator, KordaMentha, doesn’t see any problem in getting the approval for this business transaction from the creditors and the Foreign Investment Review Board. They must be thrilled as the business was sold for $850 Million rather than expected $700 Million. Secured creditors will get 100% of their money. This is a good news in itself.
Lanco will get a boost in its business because it is going to approve the supply contract which the Griffin’s administrator is finalizing with Perdaman Chemicals [Coal to Urea] plants and this will be for about 2.8 million tonnes. Lanco will not have any problem in selling the remaining Coal as it plans to export Coal to power-hungry Indian Energy businesses. Lanco itself is in that business. Additionally, Lanco may also bid for Griffin’s boss Ric Stowe’s Bluewaters Power Stations along with bidders from USA and China and Japan.
I congratulate Lanco for investing in Australia and becoming a big player in Western Australian economy. I must also congratulate my good friend, Gautam Sharma, and his hard working colleagues, for assisting Lanco in acquiring Griffin. For those who don’t know Gautam, he is originally from Andhra Pradesh, India. He studied in IT in Bangalore followed by UTS, Sydney. He has done a lot for Indian students. We have been in regular contact ever since and he played a big role in our Australia Day and Indian Republic Day celebration on 24th Jan, 2010. Like me and my close friends, he loves India and Australia equally and takes the good values from both.
Yadu Singh/Sydney/18th Dec, 2010
- Lanco Infratech Buys Australian Thermal Coal Mine (panasianbiz.com)
- India’s Lanco buys Australian thermal coal mine (seattletimes.nwsource.com)
- Linc Energy soars as coal asset suitor seeks $850 mln (reuters.com)
Sir any jobs available for Indians since the markets seems bad. Acquiring is good but will this increase jobs. Please advise and guide.
I was only instrumental in presenting this opportunity to Lanco and facilitating them all the way through. All the negotiations to successfully complete the transaction were carried out by them with their in-house capabilities.
Thanks Dr Singh, for posting this blog.
Three cheers to Gautham… for his hard work in negotiating a deal between Western Australia Gov and Lanco.
I feel proud our Indian companies are doing such a huge investments in Australia, enriching both Aus n India