AUSTRALIA’s largest rail freight company Aurizon is teaming up with Gina Rinehart’s joint venture business GVK Hancock to develop a 60 million tonne per annum port and rail project to unlock coal reserves in Queensland’s
Galilee Basin.
The two companies have signed a non-binding term sheet for the development, which could represent a $6 billion investment.
Under the proposed framework, Aurizon would acquire a majority 51 per cent interest in Hancock Coal Infrastructure, which owns GVK’s rail and port projects. GVK received Commonwealth environmental approvals for a greenfield rail operation and a coal terminal at Abbot Point last year.
GVK chairman Dr G V Krishna Reddy said in a statement that the deal with Aurizon represented one of the most significant transactions in Queensland’s coal history. He said it could lead to the development of GVK’s Alpha, Kevin’s
Corner and Alpha West mines, creating one of the world’s largest integrated coal projects.
“I am sure it will be a win-win relationship, leveraging off each other’s strengths in project development and operation,” Dr Reddy said.
Aurizon managing director and chief executive Lance Hockridge said the proposed partnership was a significant milestone because it brought together two advanced, large-scale players in the mine-rail-port space for the Galilee Basin.
“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,” Mr Hockridge said.
“This solution could also provide significant opportunity for new and existing Bowen Basin producers to utilize elements of this infrastructure.”
Upon the transaction being completed, Aurizon would gain the rights to operate and jointly manage the rail infrastructure with GVK and to exclusively provide above-rail haulage from the Alpha and Kevin’s Corner mines.
The two companies will now work together to determine an optimum rail solution, which may include a combination of GVK’s rail infrastructure and Aurizon’s Central Queensland Integrated Rail project that would ultimately connect with the proposed coal terminal at Abbot Point.
Aurizon reported that the rail solution would be located within the Queensland Government’s preferred rail corridors.
The State Government recently sold half of its 18.2 per cent share in Aurizon for $806 million.