GVK wins Australian state nod for coal rail line

This clears another hurdle for GVK's $10 bn Alpha coal project

GVK Power & Infrastructure won approval on Wednesday from the Australian state of Queensland for a proposed 500-km rail line, clearing another hurdle for its $10 billion Alpha coal project.

The state is looking to speed approvals for projects in its Galilee Basin in central Queensland, where five major mines could produce more than 200 million tonnes of coal a year, putting it on par with the state's coal-rich Bowen Basin.

The state also approved a competing rail corridor proposed by coal rail transporter, QR National working with another Indian company, Adani Enterprises , to develop another mine in the untapped Galilee Basin.

"After exhaustive negotiations with all the mine proponents, I believe that the responsible development of the Galilee Basin can be achieved by defining an east-west extension of the QRN network and a north-south corridor to facilitate a new standard gauge line," Queensland Deputy Premier Jeff Seeney said in a statement.

In a statement, GVK chairman G V Krishna Reddy said, "This investment will deliver wider benefits as it provides both initial and additional capacity to satisfy both Galilee and Bowen Basin rail capacity requirements in the future."

GVK's Alpha coal project is the most advanced in securing government approvals, although it hit a snag this week when the federal government said it would take extra time to review the environmental impact of the mine, rail and port plan.

The state's decision on Wednesday means another project, the China First project being developed by billionaire Clive Palmer, will have to use one of his rivals' rail lines.

QR National said its plan is designed to make the rail system expandable to handle more than 200 million tonnes a year.