Australian miner Aquila Resources’ coking coal joint venture with Brazilian partner Vale could be held up as the two parties sort out a difference of opinion over infrastructure.
Initially the preferred option was to use the Abbot Point coal terminal from which shipments could be made from 2012-13. The JV has been offered 4 million tonnes a year at the expanded facility, though this was subject to an agreement being concluded by the end of the first quarter of this year. Queensland Rail has selected the JV as a foundation customer for its Goonyella-Abbot Point Expansion Project, which will allow coal trains originating in Central Queensland, south of Goonyella to be directed to the Abbot Point terminal.
On Tuesday Aquila released a statement setting out its preference for Abbot Point but pointing out that in order for this option to be pursued the matter had to be resolved with Vale subsidiary Bowen Central Coal by close of business on Friday. Aquila said on Tuesday morning that it considered Bowen Central Coal’s stance a default under the joint venture agreement and has issued a default notice. BCC does not agree it is a default.
Should Vale pull out of the agreement it is highly likely that Baosteel, China’s biggest steelmaker and a 15 per cent shareholder in Aquila would back the company should it need to buy out Vale’s share of the joint venture.
Eagle Downs will be developed as an underground mine targeting 4.6Mtpa of hard coking coal from a single longwall and up to 8Mtpa once a second longwall is installed.
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