Australia Pauses Approval for GVK’s $10 Billion Coal Mine
“I am stopping the clock on the process which has been given to us by the Queensland government,” Tony Burke, Australia’s federal minister for sustainability and environment, said, according to a recording provided by his office. He said he’s seeking further information.
Queensland’s state government and the Australian government were to have jointly reviewed the project as part of a bilateral agreement. Queensland on May 29 conditionally approved the venture, which is 21 percent owned by Asia’s richest woman Gina Rinehart’s Hancock Prospecting Pty.
“We have no interest in a slow process and slow time lines but we are not willing to compromise environmental standards,” Bourke said.
The Alpha operation includes a thermal coal mine, a 495-kilometer (308-mile) railway line and a port expansion at the port of Abbot Point.
The federal government “stopping the clock” and seeking additional information or a clarification is “not at all unusual,” GVK said in an e-mailed statement today. GVK and the government are working together to ensure any supplementary information or clarification is provided, GVK said.
Australia’s Great Barrier Reef may be endangered within a year without better protection from coastal development, the United Nations Educational, Scientific and Cultural Organization said in a June 1 report. The 3,000-kilometer marine park flanks the coast of Queensland state, the world’s biggest source of steelmaking coal and the exit route to Asia from ports at Abbot Point and Gladstone.
Unesco urged blocking of new port developments and related infrastructure that would affect the Great Barrier Reef, saying the scale of development poses “serious concerns” about the site’s long-term conservation.
Issues raised by the federal minister were taken into account in the state’s conditional approval, Queensland Deputy Premier Jeff Seeney said yesterday in an e-mailed statement. The federal government should meet its commitment under the state-federal bilateral pact and make a decision on the mine within a 30-day period, he said, according to the e-mail. The pact was agreed to approve projects more quickly.
Gaining the approval for Alpha will help GVK complete financing and secure final mining consents in the second half, GVK Group Chairman GV Krishna Reddy said on May 29. GVK, controlled by billionaire Reddy, plans to raise $7 billion of debt to help fund the development, as well as $3 billion by selling equity stakes in the project.
Vale SA (VALE), the world’s second-biggest miner, and India’s Adani Enterprises Ltd. (ADE) are also developing thermal coal mines in the Galilee Basin to meet Asian demand. The Alpha mine will produce about 30 million metric tons of coal a year, with construction expected between 2013 and 2016, subject to approvals.
GVK agreed in September to pay $1.26 billion for a 79 percent stake in two coal projects as well as 100 percent of the rail and port project from Rinehart’s Hancock Prospecting.
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