Mining group Glencore has reportedly presented funds with a 30-year guarantee for its coal haulage as part of the sale of its rail subsidiary, Glencore Train.
Glencore is planning to sell Glencore Train (GTrain) as part of its continued debt reduction process. GTrain incorporates a fleet of locomotives and wagons, and handles Glencore’s significant coal haulage task between its mines in the Hunter Valley and the Port of Newcastle.
According to a report in AFR’s StreetTalk column, the mining company has proposed a 30-year guarantee on its Hunter Valley coal haulage deals to whoever acquires GTrain.
It is reported that Glencore is proposing selling the network with an initial 15-year contract, with exclusive rights provided to extend that for another 15 years.
Reported variations offered for the 30-year deal include a 10+20 structure.
Glencore and its advisors reportedly made the pitch recently to Australia’s “core infrastructure players,” including IFM Investors and QIC Limited, as well as Macquarie Infrastructure and Real Assets, Brookfield, Morgan Stanley Infrastructure and Global Infrastructure Partners.
Advisors to the deal are said to be targeting those who were interested during the 2014 privatisation of the Port of Newcastle, as well as coal haulage operators Aurizon – which primarily operates in its home Queensland market, and Pacific National – which is about to be spun-off in the sale of its parent company Asciano.