Griffin Coal to Sign MoU with Qube for Coal Transportation
Griffin Coal, the Australian subsidiary of Indian infra giant Lanco is in advanced stage of negotiations with Australia-based Qube Logistics to sign an MOU for transportation of coal from mine to port, a senior official of Lanco Infratech said.
Griffin Coal, the Australian subsidiary of Indian infra giant Lanco is in advanced stage of negotiations with Australia-based Qube Logistics to sign an MOU for transportation of coal from mine to port, a senior official of Lanco Infratech said. Qube is expected to ferry around 1.25 million tonnes of coal produced from Griffin Coal mine point to Bunbury port (in Western Australia) and the MOU is expected to sign soon, the official said.
"Currently Griffin Coal is producing around 3.75 million tonnes and the MOU with Qube will see total production increase to about 5 million in the next fiscal," the official told PTI. Lanco Infratech Ltd., through its step down Australian subsidiary, Lanco Resources Australia Pty Ltd., took over Griffin Coal Mining Company Pty Ltd and Carpenter Mine Management Pty Ltd (Griffin Coal) for AUD 730 million in March last year.
Griffin Coal has recently not had any requirement to increase production of coal due to the absence of new domestic customers and the inability to raise funds for capital expenditure to export more than 7.5 lakh tonnes per annum. "But, later this month, Griffin Coal expects to enter a formal contract with QUBE Logistics to transport up to 1.25 million tonnes per annum of coal to the Port of Bunbury for sale on a FOB basis. "....there are not yet formal arrangements, and ... statutory consents may be required," Griffn Coal said in an affidavit to the Supreme Court of Western Australia recently.
A letter of Intent from Griffin Coal to Qube Logistics to expedite contracts with care and speed has been issued, the official said. James Riordan, Company Secretary and Chief Financial Controller of Griffin Coal, in an affidavit to the Australian court recently said the coal miner forecasts that for the year ended November 30, 2013 it will be cash positive by around AUD 80 million on a standalone basis.
This will be based on the agreements it had with Bluewaters and agreement it is going to have with Qube. The Supreme Court of Western Australia recently gave its nod for the Griffin Coal to enter into revised Coal Supply Agreement (CSA) with the Bluewaters power which is set to be sold to a Japanese consortium of Sumitomo Corp and Kansai Electric Power Co for an enterprise value of around USD 1.2 billion.
Under the agreement, Griffin Coal will supply 1.8 million tonnes of coal for over 25 years to Bluewaters Power Station located in Western Australia. The agreement with Bluewaters will fetch Griffin coal an additional amount of about AUD 150 million (in NPV terms) for the entire course of the agreement including about AUD 50 Million upfront, a senior Lanco Group official had said earlier.