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Jul 12, 2012, 08.23 AM IST
GVK Group is planning to achieve financial closure for its USD 10 billion Alpha Coal project in Australia by the first quarter of 2013, GV Sanjay Reddy, Vice Chairman of GVK Power and Infrastructure Ltd said today.
GVK paid USD 1.26 billion to buy the coal assets and related logistics infrastructure in Australia from Hancock through a group company GVK Coal Developers (Singapore) last year.
The Alpha Coal project includes coal mining, rail corridor from the Galilee Basin to the port of Abbot Point and construction of a port for exports. "We expect to tie up finances for the project by first quarter of the next calender year," Reddy said at a press conference here today.
"For typical coal mine like this we are targeting 30 per cent equity (and 70 per cent debt). For railway and port, both are dependent on the cash flow you receive. So there we may go for between 15 and 20 per cent equity. Out of the total cost of USD 10 billion, banks will fund around USD 7.5 billion to USD 8 billion," he said.
He said around 70 per cent of the total debt is going to come from export credit agencies of various countries. "we will be raising the balance from commercial banks which will be around a USD 1 billion to USD 1.5 billion," he stated. Meanwhile, replying to a query on the environmental clearances from the Australian Government for the project, Gina Rinehart, the world's richest woman who holds 21 per cent in the project, said the clearance is expected by end of July or early August.
She said that the Alpha Coal project is very important for the Australian economy and given a chance, she is interested to increase her stake in the project. Reddy said once the production starts from Alpha coal project, part of it would be exported to India for the group's captive consumption. "Hancock has already done lot of marketing work for coal exports. We are negotiating with those people and trying to finalise long term coal supply contracts.
Some part of the coal will come to India for GVK power projects," he said. On Green Peace releasing advertisements against investing in Galilee Basin by companies, Reddy said that they (Green Peace) are more worried about overall coal mining in that region and not only about GVK's project.
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