In a potential blow to Adani Group’s Australian mining ambitions, India’s Supreme Court has ruled that its power plants cannot pass on to consumers escalations in the price of imported coal.
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| Adani Power's Mundra thermal coal power station in Gujarat, India faces the loss of a $464m compensation payment. |
The Tuesday ruling deprives the company of a Rs 3,000 crore (roughly $464m) nest egg as the Adanis seek to open the Carmichael pit in Queensland – prospectively Australia’s largest coal mine. If the Adanis succeed in their bid at Carmichael, where they will be both buyer and seller of the coal produced, the ruling means they will be unable to manipulate price of coal overseas then seek escalations in cost of power back home.
Imported coal is strategic to Adani’s coal security. Indian companies are known to cite access to imported coal to establish their credentials as reliable producers with a secure coal supply while they bid for power projects offered by state distribution companies. Coal must be imported as India is desperately short of it.
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