PERTH (miningweekly.com) – ASX-listed Australian Pacific Coal has struck a joint venture (JV) agreement with a subsidiary of Stella Natural Resources to restart underground operations at the Dartbrook coal mine, in New South Wales.
Under the terms of the binding agreement, SNR Mineral Assets will pay Australia Pacific A$20-million for a 50% interest in the Dartbrook mine holding vehicle, AQC Investments 2.
The JV vehicle will also provide Australia Pacific with a A$10-million loan to pay out the existing Anglo American secured loan.
The JV parties will finalise a bankable development plan to restart underground mining, with coal production planned for the 2019 calendar year.
Australia Pacific earlier this year submitted an environmental assessment to restart the mine, incorporating plans to adopt bord-and-pillar mining of the Kayuga coal seam, rather than the approved longwall mining activities.
The company previously targetted a 20-year, five-million-tonne-a-year opencut operation at the mothballed underground mine. Dartbrook, which contains about 2.5-billion tonnes of coal resource, has been on care and maintenance since 2006.
The mine is currently permitted as a six-million-tonne-a-year underground longwall mine, and has substantial infrastructure in place.
“The transaction is anticipated to deliver substantial shareholder value through the recommencement of mining activities at Dartbrook. The JV will provide substantial employment opportunities and actively engage with the local community throughout the mine life,” said Australia Pacific chairperson John Robinson.
“The Dartbrook coal brand is already established in the energy markets throughout Asia with the mine exporting 25-million tonnes of Newcastle benchmark coal under former ownership.
“The recommencement of Dartbrook is aligned with positive market demand signals, coupled with limited supply response, and at a time when demand for cost efficient energy continues to be resilient together with a strengthening demand for high quality, low emissions coal,” Robinson said.
The transaction with SNR, an integrated mining business with operations in the US, will be conditional upon SNR securing funding for the purchase price and loan, as well as Foreign Investment Review Board and state government approvals.