Griffin Coal Australia may achieve break-even in FY14: Lanco

HYDERABAD: Lanco Infratech Ltd, owners of Griffin Coal in Australia, expects breakeven of its Aussie operation in the current fiscal as coal production is likely to touch 5 million tonnes per annum by December.


Lanco executive chairman L Madhusudhan Rao said the current production of coal in the Australian mine was 3.2 million tonnes per annum (MTPA) and with small expansion programme the same can be ramped up to nearly 2 MTPA.

"We are currently at 3.2 million tonnes in terms of production. With small expansion programme which is underway now, we expect by December to be at 5 million tonne per annum rate. So at 5 million tonne per annum, we are expecting the breakeven," Rao said on the sidelines of recently held AGM.

Lanco Infratech, through its Australian subsidiary, Lanco Resources Australia, acquired Griffin Coal Mining Company and Carpenter Mine Management for AUD 730 million in March 2011.

Griffin Coal Mining Company Pty Ltd, based in Collie, is Western Australia's oldest coal company with coal resources of approximately 1.1 billion tonnes.

Coal from Griffin caters to both the domestic Australian and export markets. It produced 3.11 MT of coal during the year with sales of 3.03 million tonnes.

According to its annual report (2013), Griffin Coal last year generated Rs 954 crore total income and suffered Rs 391 crore loss. The company paid Rs 96 crore towards interest and financial charges.

James Riordan, Company Secretary and Chief Financial Controller of Griffin Coal, in an affidavit to the Australian court had earlier said the coal miner forecasts that for the year ending November 30, 2013, it will be cash positive by around AUD 80 million on a standalone basis based on the agreements it had and is going to have.

On the stake sale in Griffin Coal, Rao said the next step would be to get some of the necessary approvals and take the coal production to 15 million tonne, which would create value to the asset.

A senior official of Lanco earlier said the stake sale may not happen in the current fiscal owing to market conditions.

"Our immediate priority is to arrest the cash loss that is happening," he said.

Lanco Infratech recently said it would pay AUD 7.5 million to settle the protracted AUD 3.5 billion legal battle with Australia's Perdaman Chemicals over coal supply issues.