Lanco Infratech Ltd is working out a strategic plan to ramp up production from Griffin Coal mines in Australia to 18 million tonnes a year by 2017-18. The programme would cost the company up to $ 1 billion.

“The capital expenditure (capex) would be finalised by September 2012. It would be up to $ 1 billion. The output would be increased in phases from four million tonnes at present to 18 million tonnes by 2018,” said an official privy to the development.

Lanco acquired Australia's The Griffin Coal Mining Company Pty Ltd in 2011 for $ 750 million. It has already paid $ 500 million and rest of the funds would be paid in two tranches in one year and three years.

The capital expenditure for increasing output would be funded by both equity and debt. “The exact ratio of equity and debt funding is being worked out,” the official added. Lanco would borrow debt from overseas market in either US or Australian dollar.

When asked if there was any chance of Lanco raising debt from the Indian market, the official said, “This is not viable as expenses are to be made in Australian dollar.”

Griffin Coal is currently operating Ewington 1& 2 and Muja Mines situated in Western Australia, according to the company's Web site. The miner has more than 1.2 billion tonnes of coal resources.

Griffin Coal also exports nearly 0.75 million tonnes of coal every year through Kwinana port. Lanco is also planning to develop the railway and port infrastructure that would help export coal from these mines through Bunbury port.

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