Linc Energy could be in line for billions with mine plan

RESOURCES group Linc Energy will be in line for billions of dollars in royalties if the Queensland Government backs plans for a massive mine west of Rockhampton.

Linc already runs an underground coal gasification pilot project in Chinchilla, north-west of Brisbane, which is yet to be given approval for commercial production.

Indian energy giant Adani's purchase of Linc-owned land in 2010 for $500 million includes a condition that Linc is to earn $2 for every tonne of coal exported from the site.

A Link spokesman, at a Noosa mining conference on Thursday, highlighted the potential "medium-term cash flow" from Adani, referring to an ASX announcement made at the end of June.

Adani's Carmichael mine on the site will produce 60 million tonnes of coal per year once it reaches its full potential.

For Linc, it amounts to a tidy $120 million a year for at least 10 years.

If Adani can squeeze the volume from the operation, it amounts to a total of $1.7 billion for Linc including the $500 million in cash.

The Linc spokesman said Adani was on track to produce first coal from 2016.

He said the necessary land was now held by Adani, port options were finalised and work was now under way on Carmichael's environmental impact study.

Adani has previously flagged it expected an approval before the end of 2013.

The $5.9 billion mine, in the Galilee Basin, will require 1225 workers to build and another 3800 once operations begin.

Topics:  adani, chinchilla, linc energy, mining royalties



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