INDIAN infrastructure giant GVK will pay $1.3 billion (£826 mn) for Australia`s Hancock coal and infrastructure projects as it lines up energy supplies for upcoming power plants.
The purchase of three coal mines, a railway line and port projects linking the coal projects in Queensland, involves "truly world-class coal assets in both quality and scale," said GVK group chairman GVK Reddy.
The purchase comes as Indian companies have been competing with each other to buy coal assets all over the world as they build power projects, steel and other plants to fuel the country`s fast-growing economy.
India is heavily dependent on coal for power generation.
The deal is aimed at giving GVK`s listed flagship, GVK Power and Infrastructure, sufficient fuel supplies for its planned power plants.
"This acquisition builds a strong resource business for GVK," said Reddy. "We will now be able to increase the capacity of our coal power business with an assured in-house supply of raw material," he added.
GVK, based in the southern Indian city of Hyderabad, owns and operates power, airport and other infrastructure projects in India.
These Australian projects "are together one of the largest integrated coal development projects in the world," GVK said.
GVK is taking a 79 per cent stake in the two mines, 100 per cent of a third mine along with 100 per cent ownership of rail and port projects owned by the Hancock group, led by Australian billionaire businesswoman Georgina Rinehart.
GVK`s acquisition "should help to propel these mines to successful development and on-going operations over decades," Rinehart said.
"We are very pleased with this strategic alliance with a country – via GVK that needs our coal," she said.
Some of India’s biggest corporate names have been on a shopping spree for coal assets around the globe in what has been dubbed as the "great coal rush" by India`s media.
Last year, Adani Enterprises spent $2.7 billion (£1.7 bn) to pick up coal assets belonging to Australia’s Linc Energy.
Tata Power, Reliance Power, Essar and other companies have bought coal mines from Indonesia to South Africa and Mozambique, spending a collective total of around $8 billion (£5 bn) in the last four years, according to figures compiled by Indian magazine Business World.
GVK said its transaction was expected to close and the assets would be transferred in about two weeks. It said it expected to invest $10 billion in the first phase of developing the mines, rail line and port.
