Diversified infrastructure company, GVK Power & Infrastructure's $10-billion Alpha Coal and Rail Project in Australia got a boost after the Queensland state government approved its proposed 495-km rail line.
The approval comes less than two weeks after the company received environmental clearance for the project from the Queensland coordinator general.
In September 2011, Hyderabad-based GVK acquired majority assets of Australia's heiress Gina Rinehart-owned Hancock Coal for $1.26 billion (Rs5,983.74 crore). (See: GVK acquires majority stake in Australia's Hancock Coal for $1.26 billion)
Under the deal, GVK acquired a 79-per cent stake in the Hancock's Alpha and Alpha West high quality thermal coal projects, located in the Galilee Basin in Queensland, with Hancock retaining the rest.
The entire stake in the Kevin's Corner Coal Project, located next to Alpha, and the entire stake of Hancock's rail and port project linking the two coal projects to the Abbot Point port and Abbot Point T3 expansion project, will be acquired by GVK, with Hancock retaining some tonnage capacity.
The thermal coal project consists of reserves of 7.9-billion tonnes of which at least 3.3 billion tonnes are extractable.
GVK estimates the total investment in the first phase to be at approximately $10 billion, which includes capital expenditure on the mines, rail line and port, making it the largest investment by an Indian company in Australia.
GVK, controlled by billionaire G V Krishna Reddy, plans to raise $7 billion of debt to help fund the development, as well as $3 billion by selling equity stakes in the project.
The infrastructure development includes building a 495km rail line and a 60 million tonnes per annum capacity port at Abbot Point.
GVK had last month said that it has received expressions of interest from potential users for the rail and port facilities.
GVK Group is one of India's largest infrastructure developers with interest spanning areas such as energy, airports, roads and urban infrastructure. In addition, GVK is also involved in many other businesses held by it privately including real estate, hotels, pharmaceuticals and resources.