Hancock Coal

Hancock Coal Pty Ltd (HCPL) is a wholly owned subsidiary of Hancock Prospecting Pty Ltd, the company founded by Lang Hancock. Following his death, his daughter Gina Rinehart is now the chirman of the Board and a Director.

On its website the company states that it has had "a long-standing interest in the development of the Galilee Basin, with the parent company having held coal exploration permits and investigated the Alpha region since the 1970s."

In mid-September 2011 GVKannounced that, via subsidiaries, it had entered into agreements with Hancock Propsoecting to buy 79% of Hancock Coal's Alpha Coal Project, the Alpha West coal project and all of the Kevin's Corner Coal Project and Hancock's interest in "the rail and port project connecting the above coal projects to the port of Abbot Point and Abbot Point T3 expansion project".

In it's media release, GVK stated that "at full production the three coal projects are together expected to supply about 84 million tonnes per annum to the global sea-borne coal market. The first phase of production, expected to start in 2014, envisages a total production of over 30 million tonnes per annum of high quality thermal coal."

Coal interests
Hancock Coal owns the Alpha Coal Project and, according to a March 2011 investor presentation, is also "investigating additional opportunities within this Project, Alpha Coal Western Area."

Another Hancock Prospecting subsidiary, Hancock Galilee, is the owner of the Kevin's Corner Project.

Each project is being investigated with the aim of producing 30 million tonnes of coal a year.

Coal export terminal interests
On its website the North Queensland Bulk Ports Corporation states that in late 2009 it sought sought expressions of interest for the developed of Terminals 2 and 3 at the Abbot Point Coal Terminal. The corporation states that "the Preferred Developers, Hancock Coal Limited and BHP Billiton Limited are currently working with NQBP to enter into a Framework Agreement to progress the project and are finalising preliminary design and environmental studies."

Courting buyers
In late 2010 and the first half of 2011 Hancock Coal was in negotiations over the sale of a significant share of its coal projects. While some reports stated that all of the company would be bought Rinehart stated in a media release that "the Hancock companies will continue to hold equity in our major Queensland coal projects. We always recognised we would not be able to retain 100% equity given the significant size of the investment required for the three mines and their infrastructure – but remain keen to hold a significant position."

Hancock was in exclusive negotiations with the Indian company, GVK Power and Infrastructure, a subsidiary of the infrastructure group GVK. Forbes reported that GVK "currently produces 900 megawatts of power. It has 3,500 megawatts under construction and development, including a 540 megawatt thermal coal-fired plant in North India."

It was reported in the Economic Times in India that the deadline for exclusive negotiations with GVK had been extended from May 15 to June 15. An anonymous source close to GVK complained that the asking price had increased by 30% due to strong interest in the project. The report stated that "the initial equity component of the transaction would amount to $1.7 billion, with another $1 billion estimated to be spent when mining commences".

In mid-June 2011 it was reported that an agreement had been reached for GVK Power and Infrastructure to purchase the Alpha and Kevin's Corner projects for $2.4 billion. "The individuals have signed, but the companies haven’t. It will take around a month for the complete paperwork to be completed. A formal announcement is expected shortly after that,” an anonymous GVK executive told the Wall Street Journal. It was reported that GVK would pay $1.25 billion at the time the agreement was formally signed off on with a further two equal instalments. There was no mention of Hancock retaining a share in either project.

In late August it was reported that GVK had agreed to pay $1.3 billion for the two coal projects plus $900 million to develop the logistics infrastructure. "The transaction will be funded by ICICI Bank, Standard Chartered Bank and Axis Bank. Ernst & Young advised GVK, whose board is expected to meet within 10 days to approve the deal," the Economic Times reported. Other bidders for the projects were GMR Infrastructure, JSW Energy and Essel Mining of the Aditya Birla Group. "The deal will give GVK steady and secure access to the fuel for its plans in the power sector as supply in India gets crimped by environmental holdups and troubles in the Maoist-dominated coal-producing areas," it was reported.

Contact details
Hancock Coal Level 8, 307 Queen Street Brisbane Queensland Australia 4000 Phone: (07) 3231 9600 Email: mail AT hancockcoal.com.au

Hancock Prospecting Pty Ltd HPPL House 28 – 42 Ventnor Avenue West Perth Western Australia, Australia 6005 Phone: (08) 9429 8222 Email: mail AT hancockprospecting.com.au Website: http://hancockcoal.com.au/

Related SourceWatch articles

 * Australia and coal
 * Queensland and coal
 * Indian companies investments in overseas coal mines