Port Newcastle
A coal ship waits to be loaded at the world's biggest coal export terminal in Newcastle, located north of Sydney in this March 11, 2007 file photograph. Hastings Funds Management and China Merchants Group have won a state government auction for a 98-year lease on Australia's Port of Newcastle, the world's biggest coal export terminal, paying a higher-than-expected A$1.75 billion ($1.6 billion), in an April 30, 2014 announcement. REUTERS/David Gray/Files (AUSTRALIA - Tags: ENERGY BUSINESS POLITICS)
A coal ship waits to be loaded at the world's biggest coal export terminal in Newcastle, located north of Sydney in this March 11, 2007 file photograph. Hastings Funds Management and China Merchants Group have won a state government auction for a 98-year lease on Australia's Port of Newcastle, the world's biggest coal export terminal, paying a higher-than-expected A$1.75 billion ($1.6 billion), in an April 30, 2014 announcement. REUTERS/David Gray/Files (AUSTRALIA - Tags: ENERGY BUSINESS POLITICS)

The New South Wales government announced on Wednesday the sale of the Newcastle Port, the world's biggest coal export terminal, for $1.62 billion to joint venture partners Hastings Fund Management and China Merchants.

NSW Premier Andrew Baird and Treasurer Andrew Constance said the privatisation of the port under a 98-year lease would make Newcastle "the jewel of the Asia Pacific" since the gross proceed of the sale would be used to revitalise the city's commercial business district, including the construction of a new light rail project.

Previous privatisation such as the sale of Port Kembia, Port Botany, power generators and desalination plant had raised $120 million for the revatalisation of the city.

Baird said the city was surprised by the final result of the transaction since their initial estimated was that the sale proceed would be only about $700 million, not $1.2 billion, after the transaction cost and debt are repaid. The amount would go into the Restart NSW infrastructure fund which would give the city a potential $2 billion war chest before the 2015 election.

The port handles about 40 per cent of Australia's coal export.

Meanwhile, on the same day, Australian mining company Padbury's said that its previously announced $6.5-billion funding deal for a new iron port and rail development collapsed.

Padbury said in the earlier part of April that it secured mega funding from unnamed Australian equity investors, which caused its share prices to zoom, prompting regulators to halt trading of Padbury shares until the miner provided more information.

Padbury eventually revealed that the funder would be Alliance Super Holdings and Superkite which are controlled by former hair clinic operator Roland Bleyer.

The company said it would continue to seek all available opportunities to exploit its existing intellectual property in relation to the Oakajee project.