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ALREADY Australia's richest person with an estimated net worth of more than $10 billion, Gina Rinehart has just got a whole lot richer thanks to the sale by her Hancock Prospecting of a majority share in thermal coal assets in Queensland's Galilee Basin to Indian conglomerate GVK for $US1.26 billion ($A1.21 billion).
The long-mooted deal means that Mrs Rinehart is to partner GVK in the planned first-phase development of Galilee's coal resources.
This had been an ambition long harboured by her father, the late Lang Hancock of Pilbara iron ore royalties fame, but the fulfilment of that ambition is now actually in sight thanks to booming demand for coal to underpin the electrification of China and India.
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GVK is buying up to a 79 per cent shareholding in the Alpha (Tad's Corner) and Alpha West (Paul's Corner) projects, 100 per cent of the adjacent Kevin's Corner coal project and 100 per cent of the supporting rail and port project needed to bring the currently stranded Galilee coal to market.
Payments are to be staged, with $US500 million paid first up and the remainder due in no more than three years. Mrs Rinehart said in a statement that to the best of knowledge, the Galilee coal project was the largest project to date undertaken by both Australian and Indian companies.
''We are also very pleased with this strategic alliance with a country (via GVK) that needs our coal and which should help to propel these mines to successful development and on-going operations over decades,'' Mrs Rinehart said.
Hyderabad-based GVK is controlled by Indian billionaire GV Krishna Reddy. He said GVK would now be able to increase the capacity of its coal power business with an ''assured in-house supply of raw material''. GVK's interests range from power generation to tollways, hotels and airports.
Diversification has also been a feature of Mrs Rinehart's business push in recent years away from the original reliance on the Pilbara iron ore royalty stream from Rio Tinto. Her company is now a half-owner in the Hope Downs iron ore mine and is planning to build a new iron ore mine at Roy Hill.
Then there has been the push to develop the Galilee coal business and investments in Ten Network and Fairfax Media. But the full extent of Mrs Rinehart's business interests is not known.
The sealing of the deal with GVK comes shortly after the New South Wales Supreme Court ruled that the details of a legal action involving the Hancock family that was launched on September 5 should remain suppressed, because publication would ''deprive'' Mrs Rinehart of provisions of a 2007 deed that family disputes be settled in confidence. The dispute centres on the governance of a family trust.
''This is not the first occasion of discord in the family, which has immense wealth, no small part of which resides in the trust,'' Justice Paul Brereton said.
Before the Galilee Basin is confirmed as a major new coal province, huge spending on infrastructure will have to take place. GVK has put the cost of the first stage development at $US10 billion.
Apart from the full-scale mine development, there will be the cost of building a 495-kilometre rail line to new port facilities at Abbot Point, Queensland's most northerly coal port.
Earlier this year Mrs Hancock said her company had always recognised that it would not be able to retain 100 per cent equity in the Galilee coal dream given the size of the investment required.
''We only regret that, with Australia's high costs and the risks of additional taxes, our Australian company unfortunately won't be able to retain as much equity as we had hoped,'' Mrs Rinehart (pictured) said in May. The three mines (Alpha, Alpha West and Kevin's Corner) will eventually have annual capacity of 84 million tonnes. An initial annual production target of 30 million tonnes of thermal coal, starting from 2014, has been set.
Read more: http://www.smh.com.au/business/coal-assets-a-hot-item-20110918-1kfy7.html#ixzz1YLUfrHET
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Last
1.4¢ |
Change
0.000(0.00%) |
Mkt cap ! $107.9M |
Open | High | Low | Value | Volume |
1.3¢ | 1.4¢ | 1.3¢ | $2.872K | 218.1K |
Buyers (Bids)
No. | Vol. | Price($) |
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2 | 1041062 | 1.4¢ |
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1.5¢ | 507617 | 3 |
View Market Depth
No. | Vol. | Price($) |
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1 | 1000000 | 0.014 |
4 | 441333 | 0.013 |
4 | 663253 | 0.012 |
3 | 590501 | 0.011 |
2 | 150000 | 0.010 |
Price($) | Vol. | No. |
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0.015 | 507617 | 3 |
0.016 | 408887 | 5 |
0.017 | 64931 | 2 |
0.018 | 1276989 | 7 |
0.019 | 1506300 | 2 |
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