Australian rail freight company Aurizon has signed a non-binding term sheet with GVK Coal Infrastructure to jointly work towards the development of the Galilee Basin coal reserves in Queensland.
Under the deal, Aurizon will acquire a 51% stake in Hancock Coal Infrastructure, which owns GVK Hancock's rail and port projects, for an undisclosed sum.
The partnership will collectively develop rail and port infrastructure and, as a result, deliver export capacity of 60 mtpa of coal, representing an investment for Queensland in the order of $6bn.
GVK chairman Dr. G V Krishna Reddy said the agreement is one of the most significant deals in Queensland's coal history.
"The development of the rail and port infrastructure will unlock the Galilee Basin and see the development of Alpha, Kevin's Corner and Alpha West, creating one of the largest integrated coal development projects globally," said Dr. Reddy.
Aurizon managing director and CEO Lance Hockridge added, "The proposed Aurizon-GVK Hancock arrangement is a significant milestone because it brings together two advanced, large-scale players in the mine-rail-port space for the Galilee."
"Following completion of the transaction, Aurizon would gain the rights to operate and jointly manage with GVK the rail infrastructure and to exclusively provide above rail haulage from GVK Hancock's Alpha and Kevin's Corner mines for up to 60mtpa of coal," said GVK Hancock in a statement.
The proposed rail project will be located in the Queensland Government's preferred rail corridors for the development of the Galilee Basin as defined under Queensland Government policy unveiled in June 2012.
GVK had previously bought a 79% stake in Alpha Coal and Alpha West Coal Mines, alongside an additional 100% stake in Kevin's Corner Coal Mines from Hancock Coal for $1.26bn.
Image: Aurizon and GVK Coal Infrastructure will develop rail and port infrastructure to unlock coal reserves in Queensland. Image courtesy of Aurizon.