GVK Says Australian Alpha Coal Mine Order Book Oversubscribed
India’s GVK Group said the order book for the Alpha thermal coal project in Australia is oversubscribed as the company seeks financing for an $11 billion mine, rail and port development.
Nineteen potential buyers from nine countries have made purchase commitments including letters of intent and memoranda of understanding for more than 40 million metric tons from the project in Queensland’s Galilee Basin, said Paul Mulder, the managing director of coal and infrastructure of GVK Hancock, the company’s Australian unit. Construction is planned to start next year with first exports as early as 2016, Mulder said in an interview in Brisbane yesterday.
GVK and India’s Adani Enterprises Ltd. (ADE) are among companies proposing to spend more than $25 billion to ship the fuel from the Galilee to Asia, even as producers such as Glencore Xstrata Plc shelve projects as prices decline. Australia, the world’s second-largest supplier of the power-station fuel, is forecast to ship 183 million tons this year.
“Korea, Japan and China are up there,” Mulder said at his office in the capital of Queensland state, adding that the project has also attracted interest from buyers in Taiwan, the Philippines, Malaysia, Thailand, India and Vietnam. “They are all vying for a big slice of the action.”
The Alpha mine will be able to ship coal at a cost of $55 a ton, Mulder said. Prices at Newcastle Australia, the benchmark for Asia, have slipped as much as 19 percent in 2013 to trade at $76.10 this month, the lowest since November 2009, data from IHS McCloskey show.
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