GVK, Adani Believe Hope Remains For Australian Coal
Debasish Mishra, a partner and head of energy practice at Deloitte Touche Tohmatsu India in Mumbai, told Bloomberg that "GVK and Adani have reached a point of no return" and it is thus "very difficult for them to exit," suggesting that perhaps they are moving forward with their projects simply because they have no choice.
However, the two companies remain optimistic: undeterred by China's new coal policy, GVK believes the Alpha mine will begin producing in time to meet "Asian demand that's forecast to increase 24 percent by 2018." Adani intends to export the coal from the Carmichael mine to India.
Shedding light on GVK's positivity, Paul Mulder, managing director of infrastructure and coal at Hancock Coal, which is owned by GVK and Hancock Prospecting, said he believes that coal developers are "taking a short-term view of a mature industry with bright long-term prospects," according to Bloomberg.
"If you look at what China's done in the last two years, going from 2010 to 2012, they've become a net importer of coal of some 250 million tons per year. Korea is lifting and Japan is starting to expand its baseload also. There's going to be cyclical up and downs," he concluded in conversation with the publication.Only time will tell if the companies' optimism is merited. Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article. Related reading: All Eyes on Australia as Coal Miners Face Royalty Hikes, Lower Output Will China's "Control Coal" Policy Impact the US? GVK, Adani Believe Hope Remains for Australian Coal from Coal Investing News
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