Hancock Prospecting sold a majority stake in two Galilee coal prospects - Kevin's Corner and Alpha - to GVK in 2011 under a deal believed to include a $1.3 billion upfront payment and a requirement for a $1 billion payment later on. However, the latter payment is still unresolved more than three years on, with Hancock Prospecting listing the unpaid amount at $656 million in its 2013 financial accounts. 

That asset was written down to nothing in Hancock Prospecting's 2014 financial accounts, which were published by the Australian Securities and Investments Commission on Friday.

"The carrying amounts of the financial assets relating to a coal transaction with GVK ... is based on the ability of the purchaser, GVK, to complete the outstanding transaction conditions, which includes the payment of substantial amounts," the company wrote. "Management believes it is increasingly unlikely that these accounts will be received from GVK."

The failure to complete the payment is a further sign of GVK's struggles in the Galilee, which have been compounded by huge debt problems.

The company is believed to require about $10 billion worth of debt to build its Galilee project, which includes a mine, rail and port to the coast.

But with thermal coal prices from Newcastle falling more than 27 per cent over the past year, and fetching just $US62.60 ($71.76) per tonne this week, sourcing that kind of debt will be difficult.

GVK appears to have ceded ground to fellow indian company Adani, which is building a rival coal project in the Galilee.

A lucrative iron ore joint venture with Rio Tinto remains Hancock Prospecting's prime source of cash, with the company receiving $2.63 billion worth of revenues in the 2014 financial year.

Hancock Prospecting reported its operating profit after tax (and after removing accounting "distortions" linked to the mining tax), was $88 million.

Prior to the impact of the mining tax and the GVK impairment, Hancock Prospecting said its operating profit after tax was $430 million.