Australian state approves extension of GFG coal mine
MELBOURNE, April 23 (Reuters) – An Australian state planner has approved the expansion of a metallurgical coal mine in New South Wales run by a unit of cash-strapped industrialist Sanjeev Gupta’s GFG Alliance.
Planning body IPC said Thursday’s consent to develop an extension to the Tahmoor coal mine, 66 km (41 miles) southwest of Sydney, carried additional environmental and social conditions.
“This is a positive outcome,” said a GFG spokesman, who welcomed the move as reaffirmation of the importance of high-quality metallurgical coal in Australian manufacturing.
“We will now take time to review the IPC’s conditions of consent and continue to progress our refinancing, which is in the advanced stages of due diligence.”
The ruling allows Tahmoor Coal, part of GFG’s SIMEC Mining, to extract an additional 33 million tonnes of coal over 10 years, in a split of 90% to 95% metallurgical coal and 5% to 10% thermal coal, to be exported from the Port Kembla Coal Terminal.
The panel said continued demand for coking coal over the mine’s life meant significant benefits would flow from extending its life, rather than building a new one.
However, it is unclear whether the mine will be developed or sold off, after the London branch of Citibank applied to the state’s supreme court this month to wind up the business.
The move, set for a May 6 hearing when the court is to give directions, was part of insolvency measures linked to GFG group’s financier, Greensill Capital.
GFG Alliance is in discussions with administrators after Greensill’s supply chain finance business unravelled when its main insurer stopped providing credit insurance on $4.1 billion of debt in portfolios.
In court documents, Greensill said GFG had started to default on its obligations, but Gupta has maintained that his steel businesses have adequate current funds and that its business was strong.
Tahmoor produces about 2 million tonnes of coal a year.
(Reporting by Melanie Burton; Editing by Clarence Fernandez)