Bunbury coal exports could quadruple

Coal could soon be Bunbury’s biggest export after Griffin Coal’s owner Lanco Infratech last week settled a bitter multi-million dollar legal battle and cleared the way for Griffin’s expansion and export plans.

Since buying the debt-ridden coal mine in 2010, Lanco has launched ambitious plans to ramp up coal production at Griffin fourfold and ship up to 18 million tonnes of coal a year out of the Bunbury Port.

Lanco last Friday agreed to pay Perdaman Chemicals and Fertilisers $7.5 million plus legal fees (without admission of guilt) and ended the legal feud between the two companies.

The drawn out legal dispute with Perdaman had threatened to sink Lanco’s export plans.

Perdaman launched a $3.4 billion lawsuit against Lanco in 2011, claiming Lanco reneged on a 25-year contract to supply its planned urea plant with coal.

Perdaman alleged this ruined the company’s chances of securing finance for its planned Colliebased $3.5 billion urea plant.

Court proceedings revealed Griffin was losing up to $10 million a month during the litigation and embattled Lanco was forced to call in parent company Lanco India to help keep Griffin afloat.

The almost two-year long litigation was described last December by WA Supreme Court judge James Edelman as an “epic saga” where both parties had “left few stones unturned and few issues undisputed”.

In a statement, Lanco Infratech CEO Prasad Kandimalla said the “nominal” settlement would allow the company to move forward with its “exciting expansion plans”.

“If allowed to continue, this case would have taken another 12 to 14 months for the trial and judgment, resulting in significant legal costs and loss of management time,” Mr Kandimalla said.

“This outcome will have a positive impact on the entire group, and especially for Griffin Coal.”

Bunbury Mayor David Smith said he supported the plans but there was still work to be done, including stringent environmental assessments.

Total export tonnage from Bunbury Port in 2012 was 12.6 million tonnes, largely alumina from BHP Billiton’s Worsley refinery.