Torrential rain in Collie has added intrigue to a bitter legal battle ensnaring Lanco Infratech's Griffin Coal operations in the South West town.
Griffin's mine remained closed last night, after localised flooding on Wednesday, although its rival Premier Coal restarted full production yesterday morning.
The weather damage will add to Griffin's financial woes, with the mine already losing about $10 million a month, as it awaits a new supply deal to refloat its fortunes.
It came as Perdaman Chemicals renewed its legal battle with Lanco Infratech in the Supreme Court yesterday.
Perdaman wants to wind up Griffin Coal as part of its separate $3.4 billion claim against Lanco that it undermined the financing of its planned coal to urea plant in Collie.
The legal action has also temporarily scuttled the $1.2 billion sale of nearby Bluewaters power station, which buys its coal from Griffin. The deadline for the exchange of documents in that trade was to be yesterday, but has been pushed out until Friday pending the resolution of Perdaman's legal action.
Lawyer Martin Bennett for Perdaman told the court yesterday that Griffin owed creditors $23.2 million, including almost $12 million of claims that were more than three months old.
"This is not some temporary cash flow crisis," he said.
Lanco argues $40 million in new financing facilities will kick in from next month and that the sale of Bluewaters and improved coal supply contracts would inject another $150 million into the business.
Perdaman is separately seeking more than 60 caveats over Griffin's mining tenements to protect its interests, and wants an injunction on the Bluewaters trade until it gains security over Griffin's coal assets to enforce its coal supply contract.
The action places Perdaman in the interesting position of trying to enforce its contract while at the same time seeking damages.
Perdaman's actions are a bid to stop Lanco's lender, ICICI Bank, or the Japanese buyers of Bluewaters, being given secured creditor status above the rights of Perdaman.
Supreme Court Judge James Edelman reserved a decision on the caveat issue until Tuesday, according to the parties, with a decision on the more substantive issues expected for Thursday.
Although production at Griffin has temporarily stopped, it recently completed a process of stockpiling coal at Bluewaters.
The CEO of Bluewaters, Wayne Trumble, said that power supplies from the plant had not been affected by the deluge.
Because of the importance of coal to power supplies, any significant transaction in the Collie region must be approved by the Barnett government.
As such, the government is appearing in a limited capacity in the case. Lanco has consistently denied the claims and has said that Perdaman is being opportunistic, but admits to financial difficulties.
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