Leading infrastructure company Lanco Infratech Ltd which acquired Australia's Griffin Coal, expects full-fledged revenues from the coal asset from the next fiscal, compared to marginal revenues this fiscal.

Mr Suresh Kumar CFO of Lanco said that through its step down Australian subsidiary, Lanco Resources Australia Pty. Ltd has concluded a binding agreement with Griffin Energy Group Pty Ltd and Carpenter Mine Management Holdings Pty Ltd to purchase 100% shares of Griffin Coal Mining Company Pty Ltd and Carpenter Mine Management Pty Ltd (Griffin Coal) for AUD 730 million. It already made the upfront amount of AUD 483 million so far for the acquisition of mines and the remaining AUD 250, which will be raised through internal accruals, would be paid over a period of four years.

The company would require 40 million tonnes to 50 million tonnes of coal over the next four years to fuel its power projects in India. The acquisition will meet 30 percent of its overall coal requirement till 2015.

The deal is also expected to bring in significant cost savings for Lanco, as the cost of coal at Griffin is estimated to be at around AUD 80 to AUD 85 per tonne compared to the current market price of AUD 115 to AUD 120.

Griffin coal, based out of Collie in Western Australia, owns the largest operational thermal coal mines in Western Australia, and expects to give Lanco access to 4 million tonnes of thermal coal, which can be increased to over 15 million tonnes in the near term, post development of evacuation infrastructure. The mining tenements contain over 1.1 billion tonnes of JORC compliant thermal coal resources.

The mine is strategically located on the western coast of Australia, hence closer to India compared to the mines in the New South Wales and Queensland areas of Australia. Significantly, the Griffin coal mines are well connected to two ports through both rail and road. The nearest port being the port of Bunbury located at a distance of 85 kilometers from the mine.

(Sourced from RTT)