Lanco Infratech Ltd today announced that Griffin Coal, a subsidiary of Lanco Resources Australia, has formally terminated its Coal Supply Agreement (CSA) with Perdaman Chemicals and Fertilisers (Perdaman) Pty Ltd. The deal was called off as the condition precedent to the implementation of that CSA concerning Perdaman's financial closure was not met by Perdaman.

However, Griffin Coal has offered to withdraw this formal termination notice and to provide Perdaman with additional time until October 15 to achieve financial closure, including certain terms and conditions in line with the CSA. This offer is open for acceptance by Perdaman until September 6.

Legal tangle

Speaking from Perth, Mr Nagaprasad Kandimalla, Chief Executive Officer, Business Development, Lanco Infratech, told Business Line that the deal was for supply of 2.7 million tonnes of coal a year from the Griffin mines.

“The Griffin Mines, with estimated reserves of over one billion tonnes, were acquired by the Lanco Infra arm in December 2010 for $750 million. The mines currently produce 4 million tonnes per annum. It is proposed to develop infrastructure and port, and step up production from the mine,” Mr Nagaprasad said.

Lanco Infratech had got into legal tangles with Perdaman, which had claimed damages for non-supply of coal from Griffin mines. The contract was carried over from the previous mine owners. Lanco Infratech had acquired these mines through its overseas arm.

Meanwhile the main case with regard to Perdaman's claim for damages will come up for trial later during the year. Interim relief sought by Perdaman was negated by an Australian court.

The company shares closed at Rs 17.10, up Rs 0.95 on Tuesday.

Related Topics