GVK Coal Infrastructure (Singapore) Pte Ltd, part of GVK Hancock, on Monday said it has finalised a commercial agreement with rail freight operator Aurizon to jointly develop a rail line and a new coal terminal in Australia’s Galilee Basin coal reserve.
This is expected to provide equity and debt funding including third-party debt finance to achieve financial closure.
Earlier, GVK had announced $10 billion investment to develop Hancock coal mines including nearly $6 billion to set up rail transport corridor and port infrastructure. About 1,300 jobs are expected during construction and nearly 300 long-term jobs once it becomes operational.
The proposal was non-binding but both companies have aligned on key aspects and were drafting definitive legal documents. Besides, only 300 of the 500 km new corridor and track under the original GVK Hancock proposal will be constructed before connecting into existing Aurizon infrastructure.
“We have made significant progress towards realising this project. This milestone symbolises our common vision and I look forward to progressing this historic infrastructure development together with Aurizon,” said G V Krishna Reddy, Chairman, GVK.
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.
“There’s been considerable work by both parties over recent months to better define the rail transport solution for the project, both from an engineering and a commercial perspective,” said Lance Hockridge, MD & CEO, Aurizon.