Gujarat NRE settles Australian mine spat

Gujarat NRE Coke Ltd, the largest independent producer of metallurgical coke in India, has settled a spate of litigations over a mining lease of a coal mine in Australia.

The settlement, reached for a little over $45 million, has helped Gujarat NRE Coking Coal Ltd (GNCCL), the Australian subsidiary of Gujarat NRE Coke, conclude the acquisition of the land associated with the mine called NRE No.1 Colliery, the company said.

Gujarat NRE had acquired the underground coal mine in 2004, one of the oldest operating mines in Australia. The mine, spread over 6,421 hectares with reserves of over 300 million tonne (mt) of coking coal, is located in New South Wales, 14 kms from the Kembla Port Terminal.

The lease, acquired from Bellpac Pty Ltd, comprises an extensive underground area, much of which is owned by the Sydney Catchment Authority.

“The company had concluded the acquisition of the mining lands associated with NRE No.1 Colliery which includes the settlement of litigations with various parties related to the acquisition of the mining lease and the associated land,” GNCCL
recently told its shareholders.

The $45 million settlement involves acquisition of the associated mining lands with NRE No.1 Colliery of about 93 hectares; termination of any royalty payment liability under the agreement with Bellpac for acquisition of the mining lease; termination of remediation obligations with Bellpac and settlement of three litigations with multiple parties which removes all potential uncertainties and obstacles with the access to the mine and the development plans for it.

GNCCL is now in process of setting up longwall mining operations, under which a long wall of coal typically 1-2 metres thick is mined in a single slice, at the NRE No.1 mine and plans to produce 3 mt a year there and another 3 mt from its NRE Wongawilli mine.

“The mining lands acquired were crucial not only for current operations but also for the proposed development as the company would require this land for operational logistics including coal handling and stockpiling. Ownership of these adjoining areas ensures that the company would not require approval or negotiation of access agreements with the various landowners for the proposed use,” it said.

Parent Gujarat NRE Coke, which currently produces 1.43 mt of met coke in India, is taking its output to 4 mtpa by 2014-15 by adding 1 mt in Gujarat and another 1.5 mt in Andhra Pradesh.