Adani Enterprises won support on Monday from the State Bank of India (SBI) and an Australian state to help it build a $7 billion coal mine, defying a slump in coal prices to 5-1/2-year lows that has stalled rival projects.
The infrastructure conglomerate, whose founder, Gautam Adani, has close ties with Prime Minister Narendra Modi, has signed a memorandum of understanding for a loan of up to $1 billion from the SBI for the mine, rail and port project, which it aims to build by end-2017.
The loan, which would be one of the largest extended by an Indian bank for an overseas project, was announced as Mr. Adani was in Brisbane with a business delegation for the G20 summit, which Mr. Modi attended over the weekend.
“The MoU with SBI is a significant milestone in the development of our Carmichael mine,” Mr. Adani said in a statement.
Mr. Adani, 52, has enjoyed a rapid rise in Indian business circles in recent years, a rise often associated with Mr. Modi, who until this year headed the government in Gujarat where Adani is based and where it has a huge coal-fired power plant.
Mr. Adani also won a commitment from the Queensland State government to take short-term, minority stakes in rail and port infrastructure needed to unlock the massive coal reserves in the untapped Galilee Basin.
Australia’s federal and Queensland governments are eager to see the mine built following the loss of more than 4,000 coal jobs over the past two years.