PERTH (miningweekly.com) – Logistics specialists Aurizon have agreed to acquire a majority interest in rail and port projects owned by India’s GVK Group and Gina Rinehart’s Hancock Prospecting.

In a joint statement, Aurizon and GVK Hancock reported that the two firms had signed a nonbinding term sheet to jointly progress the development of port and rail infrastructure to unlock the coal reserves in the Galilee basin.

These included GVK Hancock’s billion-dollar Alpha, Kevin’s Corner and Alpha West coal mines.

Under the proposed framework, Aurizon would acquire a 51% interest in Hancock Coal Infrastructure, which owns GVK Hancock’s rail and port projects, with the ASX-listed Aurizon investing through an upfront investment, as well as a deferred consideration at the financial close of each phase of the projects.

“This 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 GVK chairperson GV Krishna Reddy.

He noted that the proposed relationship with Aurizon would allow the Indian firm to jointly develop the most cost- and time-efficient rail and port solution for the Galilee basin.

At full capacity, the proposed arrangement was intended to provide sufficient equity and debt funding for the projects to each reach financial close. The parties will jointly leverage the work already completed by GVK, the significant potential for financing, and Aurizon’s experience and capacity to undertake major projects and its capability in heavy-haul rail and infrastructure.

The two companies would look to develop a potential 60-million-ton-a-year port and rail project that would underpin the opening of reserves in the Galilee basin, and would also support the continued growth of the Bowen basin.

The projects would include a greenfield rail project and a development right for a coal terminal at Abbot Point.

GVK Hancock had already received primary state and Commonwealth environmental approvals for the greenfield rail project, with the port project receiving Commonwealth environmental approval in October last year.

Collectively, the proposed port and rail projects would cost an estimated A$6-billion to develop. Aurizon and GVK Hancock would jointly manage and operate the infrastructure.

Aurizon noted on Monday that the completion of the proposed transaction would be subject to a number of conditions, including due diligence, final board approvals, third-party approvals and the successful negotiation of final terms and definitive documentation.