EUROPEAN and US banks have 'shut up shop in providing new loans, according to the Indian developer of USD 10 billion in coal mines and associated rail and port works in central Queensland.

The company, Indian asset and infrastructure manager and investor GVK, plans to retain majority ownership of the three coal mines, along with the planned rail link and port project it acquired control of this year from Gina Rinehart.

It is seeking export-import bank funding to get the plan going, primarily from Asia. GVK holds 79% of the Alpha and Alpha West coal projects, along with all of the Kevin's Corner coal project. The minority investor is Ms Rinehart's Hancock Prospecting.

The Indian company wants minority investors for up to 28% of the two Alpha mines and up to 49% of Kevin's Corner and the rail and the port projects integral to the venture.

Of the USD 10 billion to be invested, USD 7 billion will be in debt with the rest in equity, in terms of GVK's contribution and that of other shareholders in the mines, railway and port.

Mr Sanjay Reddy vice chairman of GVK Power & Infrastructure said that ''European and US banks have shut up shop.” So, GVK and its advisers have turned to export-import banks for funding, which is expected to be predicated on Asian buyers taking direct equity in the mines.

Mr Reddy who is running the combined project, said of the present state of markets said that ''We have had to be a lot more conscious of financial requirements.”

The combined project is intended to produce up to 80 million tonnes of coal annually when in full production, with about 20 million tonnes headed for India and the balance for elsewhere in Asia, while the rail and port capacity will be 120 million tonnes, with the door open to other groups to use the infrastructure.

(Sourced from www.smh.com.au)