GVK in talks with Indonesian firm to divest stake in Australian coal mines

GVK group, of which GVK Power & Infra is a part, is in talks with Indonesia’s PT Kideco Jaya Agung for divesting part of its stake in the coal mines that it bought last week from Australia’s Hancock Group for $1.26 billion, business daily Mint said citing two sources.

On September 17, GVK agreed to pay $1.26 billion for a majority stake in three Australian coal mines and a port and rail project owned by Hancock Group to secure long-term coal supplies for the Indian group’s power projects.

“Along with acquiring minority stakes, Kideco is asking for an MDO (mine development operatorship),” one source, who did not wished to be identified, told Mint.

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A GVK spokesperson and Kideco did not respond to emails seeking comment on the development, the paper said.

GVK will need the financial support and technical expertise of partners to develop the mines, and the rail and port projects, with the overall investment required in the first phase pegged at $10 billion, Mint added.

“There are three projects - the mines, the port and the railways. We will keep the majority stake and divest minority stakes in them,” GVK group Chairman GV Krishna Reddy was quoted by the paper as saying.

The group is in talks with many people and it will finalise the names in some time, he was quoted as saying.