GVK Alpha coal mine has 40 million tonnes of orders
GVK Hancock is being inundated with orders for the Alpha coal project, with 40 million tonnes of purchases already committed to.
GVK Hancock managing director Paul Mulder expects to ship coal from the Alpha mine at a cost of $55 a tonne and, despite the price of coal falling to a three-year low of $76, there is still significant margin for profit.
"We have to be in the lowest quartile or the bottom section of the cost bracket in order to develop this resource and with the luxury of having a greenfield site we want to ensure our long-term success," a GVK Hancock spokesperson said.
"We want to avoid all the ups and downs other producers are experiencing and focus on the long term trend of growing demand for good quality thermal coal.
"Countries like China, who increasingly want to reduce their carbon outputs, are very interested in our coal and Queensland coal in general because it's of such a high quality and it produces more energy with fewer emissions than other coal."
Demand for thermal coal is undeniably increasing with reports of demand tripling to 2.1 billion tonnes by 2030.
This is mainly fuelled by the rise of the middle class in India and China but also by countries like Korea, Japan, Taiwan, Philippines, Thailand and Malaysia who are looking at Queensland for coal.
Abbot Point is one of the closest ports to these Asian markets and companies like GVK and Adani propose to spend more than $25 billion to ship coal to Asia.
But the dredging of Abbot Point is controversial and the Federal Government has not approved it.
It involves the world heritage-listed Great Barrier Reef and billions of dollars of revenue are at stake.