GVK boss determined to push on despite funding hurdles
DEVELOPERS of a $10 billion Alpha coal project in Western Queensland could face a 12-month delay as it struggles to secure the funding to start work.
GVK boss GV Sanjay Reddy said even in the face of funding hurdles and grim coal prices, he was determined to push on with the plan.
First coal was to be exported in 2015; that has now been pushed back to early 2016.
Mr Reddy told Reuters in New Delhi the first target was "too ambitious" considering the size and scale of the project, which aimed to export up to 30 million tonnes of coal in its first year via a purpose-built 500km rail line and massive port expansion.
His comments follow Prime Minister Julia Gillard personally delivering a final environment approval while travelling in India earlier this month.
At the same time, GVK signed a $2 billion construction contract to build the new terminal at Abbot Point.
Mr Reddy told Reuters that it would eventually be able to export coal for a cost of about $55 per tonne, ensuring a profit even with international thermal coal spot prices falling to historic lows of about $83.
"We are not a large mining company and their cost practices are exactly what we don't want to do," Mr Reddy said.
"I have always told our team, even at A$75 a tonne coal price, we still have to be a viable company.
"Today's prices are around the A$80 to A$90 range."
GVK is understood to be planning long-term supply contracts with Japan, China and South Korea, aiming to sign on to deliver deals for 15 million to 20 million tonnes.