Lanco to invest AUD1 bn in Oz coal project
Lanco Infratech plans to invest around 1 billion Australian dollars (AUD) to increase the annual production capacity of Australia-based Griffin Coal...
Lanco Infratech plans to invest around 1 billion Australian dollars (AUD) to increase the annual production capacity of Australia-based Griffin Coal to 16 million tonne. After increasing the production capacity, Lanco would look to export fuel from Griffin to East Asian countries such as Vietnam and Malaysia, a senior company official said. Griffin Coal, which was acquired by Lanco for about AUD 730 million in March 2011, presently has a production capacity of four million tonnes per annum. In a big relief, Lanco recently agreed to settle the protracted AUD 3.5 billion legal tussle with Australia's Perdaman Chemicals over coal supply issues related to Griffin. "The capital expenditure for expansion of Griffin Coal is expected to be around 900 million to 1 billion Australian dollars," the official said. At current exchange rate, AUD 1 billion would be over Rs 5,500 crore. According to the official, the annual production capacity of Griffin would be increased to 16 million tonnes, from four million tonnes now. "The expansion is expected to be completed by the end of 2016-17 financial year," he noted. Currently, about one million tonnes of coal from Griffin is exported to countries including China and South Korea, while the rest is supplied domestically to various industries in Australia, the official said. "Once the expansion is complete, we will look to increase our exports. The potential destinations would be East Asian countries such as Vietnam and Malaysia," he noted. Last month, Lanco agreed to pay over AUD 7.5 million to settle without admission of any allegations raised by Perdaman related to fuel supply from Griffin Coal. Perdaman had filed the AUD 3.5 billion-lawsuit against Lanco in Australia, alleging non-compliance with fuel supply pact by Griffin Coal for its upcoming urea plant in Western Australia. The settlement was reached on April 26 pursuant to the rules of Supreme Court of Western Australia, which allows for early and cost effective resolution of such claims.