GVK Energy Ltd, a subsidiary of GVK Power and Infrastructure Ltd, sees the $1.26-billion buyout of coal and infrastructure assets of the Hancock Group helping the company secure supplies for its thermal projects in India even while paving the way for entering into deals for supply of coal to third parties in Asia.
Hancock has estimated assets 7.9 billion tonnes of coal, and is compliant with Australia's Joint Ore Reserves Committee categorisation.
According to a GVK Energy statement, this strategic initiative will enable the Hyderabad-based company meet the energy requirements to fuel some of its projects with an option to enter into long-term coal supply contracts for purchase of up to 20 million tonnes per annum, useful for about 7,500 MW of generation capacity. Mr G.V.K. Reddy, Chairman of GVK Group, in a statement, said: “This will enhance shareholders' value, enabling the company to increase the capacity of coal power business and also help in assured supply of raw material.”
The Alpha Coal project based in Galilee Basin has estimated reserves of 3.6 billion tonnes and is expected to produce 30 million tonnes per annum. The Kevin's Corner Project has about 4.3 billion in coal reserves with a capacity to produce about 30 MTPA .
The Alpha West Coal project has reserves of 1.8 billion tonnes with a potential to produce 24 MTPA.
The deal comes packed with a rail project and has been declared as ‘infrastructure of significance' by Queensland State.