GVK gets approval for coal mine project in Oz

GVK Power and Infrastructure Ltd has got environmental clearance from the Australian government for the $10-billion (Rs 55,280-crore) Alpha coal project and railway line in Queensland.

Australian Federal Enviro-nment Minister Tony Burke has accorded approval to construct and operate the Alpha coal mine and the railway line connecting the mine to the port at Abbot Point, near Bowen in Queensland, the GVK said today in a statement.

GVK had acquired a 79 per cent stake in the Alpha Coal and Alpha West projects and a 100 per cent stake in the Kevin’s Corner project in Queensland from Australian energy and resouce firm Hancock Prospecting Pty Ltd in 2011. Hancock holds the remaining 21 per cent equity in the Alpha project. These projects are expected to hold 8 billion tonnes of coal and a peak capacity of 80 million tonnes (mt) a year. The company had also acquired a 100 per cent stake in the 500-km rail line and a 60-mt per annum port as part of the ‘pit-to-port’ logistics solution. GVK had invested about $1.26 billion to acquire these assets.

In the first week of June, Federal Minister Burke had put on hold the environmental clearance given to these projects by the Queensland state government on May 29 this year, for reassessment. “We are delighted with the federal government decision. Ultimately, we believe the overall assessment process has resulted in best practice environmental protection outcomes,” GV Krishna Reddy, chairman and managing director of GVK.

This final nod paves the way for the hotels-to-energy conglomerate to start developing the mines and the rail corridor project. Construction is expected to start next year with coal being produced in 2015-16, according to the company.

Reddy said the company was aiming to achieve financial closure for the project by June 2013. “As we have now got the final approval from the Australian government, we will be looking for financial partners,” he told Business Standard.

In Phase 1, one coal mine will be operated, producing 32 million tonnes coal a year which would be exported to various countries. In the final phase, involving operation of all the three coal mines, the annual production is expected to touch 80 million tonnes.