Fresh from making headlines for all the other wrong reasons – being sued by family members – Australia’s richest person Gina Rinehart has inked a $US1.26 billion deal with GVK that will see the Indian conglomerate take up majority stakes in thermal coal assets in Queensland’s Galilee Basin.
Rinehart’s company, Hancock Prospecting, has long said it would take on a partner to complete the coal project, the first stage of which is estimated by GVK to need $US10 billion worth of investment.
When completed, it is tipped to deliver 84 million tonnes of coal annually, with first production scheduled for 2014.
Rinehart says the Queensland project could be the biggest-ever for the two companies, with the rail project alone almost 500 kilometres long. GVK chief financial officer Issac George is quoted saying that GVK will spend a total of $US2.1 billion on the deal, with $1 billion of debt.
GVK is controlled by Indian billionaire GV Krishna Reddy and has been seeking a steady energy source for its thermal power assets. Its other assets include airports and highways.
Rinehart raised eyebrows months ago when it revealed she had offered to fly members of Parliament to the wedding of Mallika Reddy, the granddaughter of GVK chairman GVK Reddy. Former Shadow Finance Minister and Nationals Senator Barnaby Joyce accepted the offer, and was one of more than 7,000 attendees to the celebration.
Under the deal, GVK will take 100% of the state’s Kevin’s Corner coal projects, up to 79% of Alpha and Alpha West projects, and 100% in rail and port assets that connect deposits to Abbot Point. Rinehart has been offered a board seat by GVK.
”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,” Rinehart said in a statement.
It’s been a busy few weeks for Rinehart, who last week succeeded in keeping details of her family spat private.
It was revealed at the start of the month that Hancock Prospecting had nabbed a small stake in the listed coal explorer Carabella. Today the Australian Financial Review reports that Hancock is believed to have invested in minnows Endocoal and Australian Pacific Coal.
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