Companies

Lanco expects full-fledged revenue from Griffin mines from next fiscal

PTI Hyderabad | Updated on March 18, 2011 Published on March 18, 2011

A file picture of a coal mine.

Leading infrastructure company Lanco Infratech, which acquired Australia’s Griffin Coal for A$730 million (about Rs 3,400 crore), expects full-fledged revenues from the coal asset from the next fiscal.

“We will get revenues marginally in this fiscal. It is expected to have significant portion of revenues from the next fiscal. However, we cannot quantify now. It will take a couple of months to calculate,” the Lanco CFO, Mr Suresh Kumar, told PTI here.

He said the company had made the upfront amount of A$480 million so far for the acquisition of mines and the remaining A$250, which will be raised through internal accruals, would be paid over a period of four years.

“The acquisition will meet 30 per cent of our overall coal requirement till 2015,” he had said earlier.

The company would require 40-50 million tonnes of coal over the next four years to fuel its power projects in India. Griffin’s mines are expected to give Lanco access to four mt of thermal coal, which can be increased to more than 15 mt, the company said in a statement.

The deal is expected to bring in significant cost savings for Lanco as the cost of coal at Griffin is estimated to be at about A$80-85 per tonne against the current market price of A$115-120.

In addition to ramping up production, Lanco is all set to focus on improving the infrastructure around the mines for better supply logistics. Improving the port and rail networks for transporting coal from the mines to various destinations is a part of the plan.

The company also plans to strengthen the rail corridor between the Collie coal mine and Bunbury which would enhance cargo movement around the region.

Meanwhile, according to Australian media, another Indian infrastructure major GVK is in the race for acquiring Wesfarmers’ Premier Coal division in Australia.

Premier Coal produces about four mt of coal each year from the Collie Coal Basin in Western Australia. The mine is located about 200km south of Perth

GVK lost the race to Lanco in the Griffin auction and is among the contenders to buy Gina Rinehart’s $2- billion Kevin’s Corner coal project in Queensland.

When contacted a spokesperson of GVK declined to comment on the development. “We cannot comment on this right now. Till we decide on that, we cannot say anything,” a GVK spokesperson said.

Published on March 18, 2011
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