Coking Coal News: Aquila Project Could Produce 1.5m tpy

Australian coal miner Aquila Resources hopes to produce hard coking coal in 2013 from its Washpool project in Queensland’s Bowen Basin.

A feasibility study for the mine has just been completed and the miner is hoping production costs will be an at port price of around A$106 a tonne, although this price excludes royalty payments.

“The feasibility study confirms the status of the Washpool hard coking coal project area as a major coking coal resource and provides confirmation that this resource is economically recoverable with opencut mining methods,” said Aquila executive chairman Tony Poli.

Aquila said it would require A$320m of capital investment in the project with construction commencing in 2012. Washpool would be able to produce 1.6m tonnes of high-quality hard coking coal for a period of 25 years. Expected future cash flows from the mine over its expected life span would be $364m a tonne with an internal rate of return of 30 per cent.

Coal from the project will be exported via the Wiggins Island coal terminal at the port of Gladstone, Queensland.

The Washpool product would be hard coking coal with very strong coking coal properties and a higher-than-specification ash content.

Aquila Says Belvedere Will Cost $2.81 Billion To Build

Australian miner, Aquila Resources, has announced that a pre-feasibility study of the proposed Belvedere coking coal project in Queensland indicates a cost of about $2.81 billion to build.

Aquila has a 24.5 per cent interest in the project. Brazilian mining company Vale owns 51 per cent and conducted the study. Vale has an option to buy Aquila's interest at "fair market value" although it has yet to indicate whether or not it will exercise its option.

Construction of the mine could commence in 2014 with the first coal mined in 2016.

Aquila Still Committed To Eagle Downs

Australian coal miner, Aquila Resources, says it remains committed to the Eagle Downs project in Queensland, despite commencing legal action against its joint-venture partner.

Earlier this week, Aquila issued Vale Australia with a default notice, because the two companies had failed to reach agreement on whether to export through the Abbot Point or Dalrymple Bay coal terminal.

Aquila spokesman Tony Poli told ABC Australian that it has now lost its rail and port capacity at Abbot Point and the statement of claim could be for hundreds of millions of dollars.

"We have a large coking coal project of some four million tonnes per annum production, that has a significant value as of today, has more value with rail and port capacity," he said.

"But if that were to be deferred and we don't see production for several years, then clearly that's going to erode the net present value of that mine significantly."

Aquila Launches Legal Action Over Eagle Downs Dispute

Aquila Resources has launched legal proceedings against Brazilian mining giant Vale, having last week served it with a default notice on the pair's $1 billion Eagle Downs coking coal joint venture.

Aquila said it has commenced proceedings against Vale's wholly owned subsidiary Bowen Central Coal in the Supreme Court of Queensland after it issued the miner with a default notice on the infrastructure arrangements for Eagle Downs.

The default notice concerned the infrastructure arrangements for the Eagle Downs project. Aquila wanted to ship coal along the $2 billion rail line being developed by Queensland Rail from the Bowen Basin to the part terminal at Abbot Point; however, Vale preferred to use the expanded port facilities at Dalrymple, which would result in a two-year delay to the project.

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Aquila Deadline Passes For Eagle Downs

Australian miner, Aquila Resources, has said that its deadline has passed for agreement on the infrastructure plans for its Eagle Downs joint venture in Queensland with a subsidiary of Brazilian miner, Vale, Bowen Central Coal (BCC).

Aquila had given Vale until Friday to respond to the notice of default it issued last week after the two parties had a disagreement over how coal from the new mine would be transported.

Aquila wants the coal to be transported via the Abbot Point coal terminal, utilising the new rail link from the Bowen Basin coal field to Abbot Point. Vale's preference is to transport the coal via extended facilities at Dalrymple, however that would mean the project would not be able to ship coal until two years later than the projected 2013 start date if the project uses Abbot Point.

“As the relevant agreements were not executed and returned to the relevant counterparties by the deadline, capacity on the rail project and at the Abbot Point coal terminal has not been secured by the joint venture,” Aquila said in a statement.

“Aquila will continue to investigate the infrastructure opportunities available to the joint venture,” the company said.

“Whilst Aquila will continue to seek to resolve this matter with BCC, in the meantime it will pursue its rights under the joint venture agreement, in respect of the default notice it issued on BCC.”