GVK and Australian billionaire Gina Rinehart have secured an environmental permit to build their Alpha Coal project in Australia, moving it a step closer to signing off on a long-delayed $10 billion mine, rail and port project.
The GVK Hancock joint venture still needs to finalise a plan with coal rail operator Aurizon Holdings, overcome legal challenges to the project, and sign coal sales agreements before lining up financing for the huge project.
"Now that we have our Environmental Authority for our Alpha Coal Project our key focus is to continue advancing the project to a point where construction can commence," GVK Hancock said in a statement.
The Alpha mine is 79 per cent owned by GVK and 21 per cent owned by Rinehart's Hancock Prospecting.
The venture aims to produce 32 million tonnes a year of low ash, low sulphur coal from the mine in the untapped Galilee Basin, saying the project would be profitable even at today's weak prices for coal used in power stations.
"The volume and magnitude our Alpha coal project's large, shallow and very flat coal seams allow for large scale mining techniques that ensures our proposed mine remains cost competitive even in current tough market conditions," GVK Hancock said in the statement.
GVK's listed unit GVK Power & Infrastructure owns a small stake in GVK's holding in the Alpha project.
GVK's domestic rival Adani Enterprises is also trying to build a massive coal, rail and port project in the Galilee Basin, and its Australian unit also faces legal challenges to its Carmichael project.
India holds the world's fifth-largest coal reserves but still needs to resort to imports as state-owned Coal India, which accounts for about 80 per cent of the country's output, frequently misses output targets.
Copyright: Thomson Reuters 2014
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