Collectively the proposed development could represent an investment for Queensland in the order of $6bn (£4.1bn).
The companies are seeking a development of a potential 60mtpa port and rail project that would underpin the opening of reserves in the Galilee Basin and continued growth of the Bowen Basin. Aurizon and GVK Hancock would jointly manage the proposed rail and port projects.
The projects comprise a greenfield rail project and a development right for a coal terminal at Abbot Point. GVK Hancock received the primary State and Commonwealth environmental approvals for its greenfield rail project in May and August 2012 respectively. GVK Hancock’s port project received Commonwealth environmental approval in October 2012.
Under the proposed framework, Aurizon, would acquire a majority (51%) interest in Hancock Coal Infrastructure Pty Ltd (HCI), which owns GVK Hancock's rail and port projects, and would make investments.
“This is one of the most significant deals in Queensland’s coal history,” said GVK chairman Dr GV Krishna Reddy. “The development of the rail and port infrastructure will unlock the Galilee Basin and see the development of Alpha, Kevin’s Corner and Alpha West, creating one of the largest integrated coal development projects globally. I am sure it will be a win-win relationship leveraging on each other’s strengths in project development and operation."
“The proposed Aurizon-GVK Hancock arrangement is a significant milestone because it brings together two advanced, large-scale players in the mine-rail-port space for the Galilee,” said Aurizon managing director & CEO Lance Hockridge. “Aurizon has always believed that realizing Galilee Basin coal exports would require a consolidated rail and port solution that delivers a staged, commercially-sensible solution for producers. This solution could also provide significant opportunity for new and existing Bowen Basin producers to utilise elements of this infrastructure.”
Following completion of the transaction, Aurizon would gain the rights to operate and jointly manage with GVK the rail infrastructure and to exclusively provide above rail haulage from GVK Hancock’s Alpha and Kevin’s Corner mines for up to 60mtpa of coal.
Aurizon and GVK Hancock would also jointly determine the optimum rail solution that may include a combination of GVK Hancock’s rail project and Aurizon’s Central Queensland Integrated Rail Project (CQIRP) that would ultimately connect with the proposed T3 coal terminal at Abbot Point.
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