Griffin's export plans in turmoil

Daniel Mercer

Griffin Coal's much-touted export plans have suffered a major setback after Fremantle Ports tore up its contract with the embattled Collie miner.

A spokeswoman for the State-owned port operator confirmed yesterday it had issued a "termination notice" to Griffin in a move believed to have been motivated by an unpaid debt.

The decision adds to a list of woes for Griffin, which has been mired in crises since Indian conglomerate Lanco Infratech bought it for $800 million in 2011.

Carna Civil and Mining, the contractor that had been brought in to run the operation, walked away from Griffin last week after a bitter feud over money.

Griffin has been forced to run the operation with barely any equipment, raising doubts about whether it can meet its supply commitments to customers.

Among them is Bluewaters power station, one of the biggest in the South West, while Griffin also supplies BHP's Worsley Alumina and Cockburn Cement.

Fremantle Ports' decision to severe ties with the miner is understood to have left a 30,000- tonne stockpile of coal stranded at the Kwinana bulk terminal.

Griffin had exported coal through the facility for years - including about 1.1 million tonnes through 2011-12 and 2012-13 - but has had a rocky relationship with the Fremantle Port Authority under Lanco's ownership amid complaints it does not pay its bills on time.

Exports are central to Lanco's long-term plans for Griffin.

Under the plans, capacity at the mine would grow from about 4mtpa to 15mtpa and rail facilities between Collie and Bunbury would be upgraded. A new berth would also be built at Bunbury to handle the increase in coal exports, with the expansion all up costing more than $1 billion.

Griffin confirmed the relationship with Fremantle Ports had ended, suggesting it was not a matter of the authority ending the contract but the miner deciding not to renew it.

A spokesman said Griffin still had export "options" but noted the immediate priority was supplying domestic customers.