Its Alpha project in Queensland is one of the biggest mines
MELBOURNE: India's GVK Power & Infrastructure has cleared a key hurdle toward developing its A$10bil (US$9.9bil) Alpha coal project in Queensland, winning state environmental approval for what would be one of Australia's biggest coal mines.
GVK's Alpha project has made the most progress towards development among several in the untapped Galilee Basin in Queensland, where rival Indian group Adani Enterprises is planning an A$10.9bil coal and rail project.
The Alpha project is being run by Hancock Coal, 79%-owned by GVK and 21%-owned by Asia's richest woman, Gina Rinehart, who sparked a political storm last week when she won the right to hire foreign workers to build an iron ore mine.
The Queensland coal project still needs environmental approval from the federal government in Canberra and a mining lease from the state to go ahead.
The state's green light was a big step following the election of a conservative government last month which is looking to clear a backlog of resources projects worth at least US$51bil awaiting approvals.
“The new government is an absolute breath of fresh air. It is very approachable, and they have shown a real interest in coordinating development in Queensland,” said Jay Leary, an energy and resources partner at law firm Freehills.
The Galilee Basin projects have been slow to win clearance, facing opposition from environmentalists concerned about coal burning, port dredging and ship traffic along the fragile Great Barrier Reef, as well as from landowners along the proposed rail route.
“We don't think GVK knew what they were getting into when they bought a majority stake in this mine,” Greenpeace senior campaigner John Hepburn said in a statement, vowing to continue fighting against the mine. GVK shares were up 5% yesterday in Mumbai trading, handily outpacing the 0.35% rise of the broader market.
Approval from the Labor government in Canberra, though, is not a given. A previous proposal by a rival Galilee Basin project, now owned by another Australian mining magnate, Clive Palmer, to build a rail line and port at a different location was rejected by the federal government in 2008.
Canberra recently flagged a tougher approach on environmental approvals for areas near the Great Barrier Reef, working to set tighter conditions on Rio Tinto to win the go ahead for a bauxite expansion in north Queensland.
Nevertheless, GVK chairman GVK Reddy said the state approval “paves the way for us to complete financing and secure final mining approvals for the Alpha project in the second half of 2012.”
The approval from Queensland's coordinator general sets out 128 conditions for managing the environmental impact from building the 30 million tonnes a year thermal coal mine and a 495km rail line from the mine to the port of Abbot Point. The mine and rail project is estimated to cost US$6.3bil and the related port project US$3.6bil. Reuters
