GVK Coal Infrastructure (Singapore) (GVK Hancock) and Aurizon have reached a significant milestone towards their proposed transaction for the joint development of a rail line and a new coal terminal at the existing Abbot Point Port to unlock the Galilee Basin’s coal resources, including GVK Hancock’s Alpha, Alpha West and Kevin's Corner coal projects. As announced by the parties in March 2013, under the proposed framework, Aurizon would acquire a majority (51%) interest in Hancock Coal Infrastructure (HCI), which owns GVK Hancock’s rail and port projects, and would invest through upfront consideration at completion of the transaction and deferred consideration at financial close of each phase of the projects.
The proposed arrangement is intended to provide sufficient equity and debt funding (including through third party debt finance) for the projects to reach financial close. The parties have made further progress over the last few months and have reached alignment on a rail solution and on the commercial terms for the proposed transaction such as governance, timing of milestones, funding and conditions for completion.
The proposed rail solution means that for an initial stage, only 300km of the 500km of new corridor and track under the original GVK Hancock proposal will be constructed before connecting into existing Aurizon infrastructure. This will also allow a phased development at the Abbot Point T3 terminal to match volumes and ramp-up, thereby materially reducing the initial cost of infrastructure. Under the proposal, the southern rail connection would be built to narrow-gauge specification to carry trains of up to 25,000 tonnes, with the option to consider an expansion to a full greenfield line (narrow or standard gauge) if increased tonnages later justify the additional investment.
The proposed open-access rail and port infrastructure being progressed by Aurizon and GVK Hancock also facilitates a staged consolidation of tonnes from multiple miners in the Galilee and the Bowen Basins. This will deliver significant benefits for regional communities by reducing the impact on agricultural land and the natural environment.
| Company Name | CMP |
|---|---|
| NTPC | 393.65 |
| Tata Power | 427.45 |
| Adani Power | 198.40 |
| Power Grid Corp | 318.05 |
| Torrent Power | 1565.30 |
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