Huge setback for Rinehart and Reddy empires

Too early on the stop loss

Australian environment minister Tony Burke decided on Tuesday to “stop the clock” on GVK’s Alpha coal project despite approval from the state of Queensland that was given last week.

GVK in September last year paid $1.3 billion for Hancock Prospecting’s coal, rail and port projects.  The Indian infrastructure giant  is spending a further $10 billion developing the Alpha project as it lines up energy supplies for  an array of projects in power-hungry India.

Hancock’s owner and fourth richest miner in the world, Georgina Hope Rinehart joined GVK Power’s board as part of the deal and retains a 21% stake in the mines. The Alpha project was one of the biggest of Hancock Prospecting’s projects which also includes a number of iron ore and other coal projects.

GV Krishna (GVK) Reddy who steers the vast conglomerate which apart from mining  and infrastructure also operates hotels and airports, is one of India’s richest men with a fortune of over $1 billion.

Rinehart and Reddy created something of a political flap in Australia after sealing the deal at Reddy’s granddaughter’s $1 million wedding ceremony in Hyderabad in the presence  of Australian parliamentarians.

Burke said the Queensland approval fell short of national environmental standards:

Mr Burke was quoted criticising the state-level approval process on Australia’s ABC radio. “I want a streamlined approach, I don’t want a shambolic joke and that is what Queensland is wanting me to accept. I don’t have the level of trust in the Queensland government which I wish I had,” he said.

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