Adani Mining Pty Ltd of Adani Group on Friday said that it has signed a binding agreement with POSCO E&C, a global construction company and a subsidiary of the South Korean giant POSCO, to develop a greenfield non-electrified standard gauge railway line in Galilee Basin, Queensland, Australia.
The rail project will lead to the opening of the Carmichael mine project, of the Adani Group. It will also provide vital opportunities for Australian industry involvement. The project North Galilee Basin Rail (NGBR) is expected to commence in early 2015.
The agreement gives exclusive rights to POSCO E&C to be the EPC (Engineering, Procurement and Construction) contractor for the 388km greenfield project. The final contract will be executed by the end of 2014, which will enable POSCO E&C to facilitate the procurement of debt financing as an equity participant. The standard gauge rail line proposes to have a capacity to haul 60 mtpa (million tonnes per annum). Adani and POSCO E&C will jointly manage the development of this rail line in Australia.
Commenting on the development, Adani Group Chairman Gautam Adani said, “The rail project will lead to the opening of the Carmichael mine project which will deliver, in excess of 10,000 jobs, and will also provide vital opportunities for Australian Infrastructure development and contribute to energy security of India by lighting the lives of millions of Indians.”
POSCO E&C President and CEO, Tae-Hyun Hwang stated, “We are delighted to partner with Adani and contribute to the development of the rail infrastructure. I believe the rail project will greatly benefit from this partnership. This is the largest EPC project in the region for POSCO E&C, and we will put in our best effort to maximise our engineering, procurement and financing capabilities to successfully complete the construction.”
Adani Australia CEO and Country Head Jeyakumar Janakaraj said he was delighted with binding agreement signed between the two companies in a record time. “This is the first major step towards finalising the project’s construction contracts and we are proud to be associating with a partner of POSCO’s E&C standing. The binding agreement will enable us to develop a cost efficient rail solution and this relationship gives Adani access to Korean market, POSCO’s expertise and capital.”
According to Adani Group, the Queensland government in Australia, has declared the rail corridor as a strategic development area. This rail infrastructure is aligned with the Queensland government policy of strategic infrastructure being located to allow multi-user participation and will provide access to other miners, helping unlock further growth opportunities for jobs in Queensland.