INDIAN giant GVK and rail company Aurizon are combining to develop the $6 billion rail and port infrastructure needed to unlock the Galilee Basin’s central Queensland coal resources.
The companies announced yesterday a non-binding term sheet to progress the development.
“This is one of the most significant deals in Queensland’s coal history,” GVK chairman GV Krishna Reddy said.
“The development of the rail line and port infrastructure will unlock the Galilee Basin and see the development of Alpha, Kevin’s Corner and Alpha West (mines), creating one of the largest integrated coal development projects globally.”
Aurizon and GVK Hancock, which includes mining magnate Gina Rinehart’s Hancock Prospecting, plan to develop a port and rail project with the capacity to ship 60 million tonnes of coal a year to fuel power stations in India.
It involves a 500km greenfield rail line and coal terminal at Abbot Point.
Under the proposed deal, Aurizon will acquire a 51 per cent interest in Hancock Coal Infrastructure which owns GVK Hancock’s rail and port projects.
Aurizon chief executive Lance Hockridge said the company had always believed the Galilee Basin required a consolidated, staged, commercially sensitive solution.
“This solution could also provide significant opportunity for new and existing Bowen Basin producers to utilise elements of this infrastructure,” Mr Hockridge said.
Deputy Premier Jeff Seeney said the project had the potential to create thousands of jobs and provide billions of dollars in export revenue and royalties.
He said the Government’s preference for consolidation of rail corridors from the Galilee Basin was now more likely with the two companies assessing the optimum rail solution based on their two corridors.
“We have sought to find a balance between the interests of all parties involved, including project proponents, landholders and communities,” Mr Seeney said.
“Today’s announcement is a welcome step in achieving our aims.”
Queensland Resources Council chief executive Michael Roche said the deal was a massive vote of confidence in Queensland and its coal industry.
“Infrastructure projects of this size and scope are once-in-a-lifetime opportunities akin to a Snowy Mountains scheme or Townsville to Mount Isa railway line,” Mr Roche said.
The parties said completion of a deal, including Aurizon investments at completion of the transaction and financial close of project phases, was subject to conditions including due diligence.