Lanco looks to sell stake in Australia’s Griffin coal mine to reduce debts

13 October 2014 (Last Updated October 13th, 2014 18:30)

Lanco Infratech is reportedly in talks with investors to sell a stake in its Griffin coal mine in Australia and some road projects, with an aim to reducing its debt of around $5.9bn.

Lanco Infratech is reportedly in talks with investors to sell a stake in its Griffin coal mine in Australia and some road projects, with an aim to reducing its debt of around $5.9bn.

Last month, the company announced plans to sell power projects for $825m to repay some of its debts. These debts have forced the company to avoid paying wages to around 380 staff at the mine, leading to disruptions, reported ABC.

Australia member for Collie-Preston Mick Murray told the news agency that: "One of the problems is the price of coal, its just not high enough to sustain the mine.

"The cost of production is still higher than the coal price they are getting so it doesn't matter who buys it, something has to change." 

"You know with overheads...the losses continue so it's quite obvious now it's just they've decided to cut their losses and put it on the market."

The company has however noted that discussions are in preliminary stages.

"The government should have been in there a long time ago mediating and working out how we can have a sustainable mine of the future," Murray added.

"The sale won't make the mine sustainable. The cost of production is still higher than the coal price they are getting so it doesn't matter who buys it, something has to change."

Lanco, which purchased Griffin in 2011 for $760m, plans to push its annual mining production by four times to around 18 million tonnes by 2018.

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