March 11 (Bloomberg) -- GVK Group, the Indian developer of a $10 billion coal mine in Australia part-owned by Gina Rinehart, signed a pact with Aurizon Holdings Ltd. to jointly develop a rail line and port in Queensland state.
Brisbane-based Aurizon, Australia’s biggest transporter of coal by rail, would acquire 51 percent in Hancock Coal Infrastructure Pty as part of the non-binding agreement, Aurizon and GVK said today in a joint statement.
“The proposed relationship with Aurizon would allow us to jointly develop the most cost and time efficient rail and port solution for the Galilee Basin,” G.V. Sanjay Reddy, GVK vice-chairman, said in the statement.
GVK, which plans to ship coal to India for electricity generation, is seeking $7 billion in debt and $3 billion in equity to fund the project, it said in October. The company bought the thermal coal assets in 2011 from Rinehart, Asia’s richest woman, for $1.26 billion. Rinehart’s Hancock Prospecting Pty retains a 21 percent stake in the Alpha mine asset.
A number of companies have advanced plans to mine coal in the Galilee Basin, located about 500 kilometers (310 miles) from Australia’s east coast. The proposals, including from Vale SA and India’s Adani Group, have struggled with the high expense of building greenfield mines, rail and port facilities, as thermal coal prices retreated.
GVK’s project is expected to deliver export capacity of 60 million metric tons of coal, according to the statement. Aurizon and GVK will update the market when the parties execute final agreements on all terms of the proposal, they said.
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