More Indian companies are expected to follow on the heels of the $750 million takeover of Griffin Group by Lanco Infratech and express interest in WA’s other coal companies, including Wesfarmers’ Premier Coal business, which owns an open cut thermal coal mine near Collie and a share of the Scaddan prospect near Esperance.
The location of Rey Resources’ thermal coal project in the Kimberley also made it ideally suited for the export of its coal through the port of Derby to supply India’s “almost insatiable demand”, Austrade senior trade and investment commissioner to south Asia Peter Linford said.
"Until recently India had been looking at other markets because the costs out of Australia had been higher and they were looking at markets like Indonesia," he told the ABC.
"But what they've found is the quality out of Australia and the stability, whether it be political or price, and just the way of doing business, I think they're finding is easier.
"So we're seeing a shift now of more interest and in Western Australia the opportunity becomes better for India, because the freight costs and the proximity become a lot better."
Rey’s coal projects are located in the Fitzroy Trough of the Canning Basin, with exploration and mining leases and applications covering about 7500 square kilometres. The company’s strategy is to develop its thermal coal resource to support an initial export mining operation through the Derby Export Facility by 2013, as a precursor to larger scale operations.
In the initial stage Rey is concentrating on the near-surface coals, which can be extracted by highwall mining, subject to environmental permitting and native title negotiations.
Rey has already fended off one takeover bid from Indian giant Gujarat NRE Minerals.
Linford expects Indian companies will continue pursuing other Australian assets on the west coast.
"If the assets are available on the market you'll see interest from Indian companies, absolutely," he said.
"If you've got plenty of coal it's a good selling point from anywhere in Australia, but if you can do it so it arrives faster and at a cheaper cost, such as from Western Australia, obviously it's a better proposition."
