06/01/2010 - 13:06

Barnett confirms $4m Griffin negotiation

06/01/2010 - 13:06

Bookmark

Upgrade your subscription to use this feature.

The state government has confirmed it is in negotiations with the administrators of Griffin Coal to provide a pre-payment of up to $4 million against the delivery of coal under Verve Energy's current coal supply contract.

The state government has confirmed it is in negotiations with the administrators of Griffin Coal to provide a pre-payment of up to $4 million against the delivery of coal under Verve Energy's current coal supply contract.

While the Government is seeking assurances from the administrator KordaMentha on both of the quality and volume of coal to be delivered to Verve the payment is understood to be the equivalent of two weeks' production of coal.

State Treasury will underwrite any pre-purchase by Verve in the event that the company defaults and the coal is not delivered.

 

Full announcement below:

State Government offer to support Griffin Coal
Portfolio: Premier

The State Government is in negotiations with the administrators of Griffin Coal to provide a pre-payment of up to $4million against the delivery of coal under Verve Energy's current coal supply contract.

The payment is understood to be the equivalent of two weeks' production of coal.

To move ahead on this the Government is seeking assurances from the administrator KordaMentha on both of the quality and volume of coal to be delivered to Verve.

The offer is conditional on the money being used only for the operating expenses of Griffin Coal. It is being considered by the administrators and negotiations are expected to continue today.

State Treasury will underwrite any pre-purchase by Verve in the event that the company defaults and the coal is not delivered. The Government is also seeking assurances as to the security of the $4million in taxpayer funds.

"At least for the time being, this will maintain Griffin Coal as a going concern and therefore help to protect jobs while a final resolution is reached. This should allow the coal mining operation to move into better quality coal deposits to assist meeting quality and volume issues of its customers, including Verve," Premier Colin Barnett said.

The Premier communicated this offer to the State Secretary of the Construction, Forestry, Mining and Energy Union Gary Wood late yesterday afternoon after discussions with Energy Minister Peter Collier and Treasurer Troy Buswell.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options