PERTH (miningweekly.com) - ASX-listed Bandanna Energy on Monday told shareholders it was seeking potential joint venture (JV) partners for its Springsure Creek coal project, in Queensland, after completing a cost estimation for the project.

Bandanna on Monday confirmed that a capital investment of some A$743-million would be required for the Stage 1 development of the Springsure project, which would deliver some 5.5-million tons a year of coal.

The second stage of the operation, which would increase production to 11-million tons a year, would require an additional capital investment of A$437-million.

“The completion of the definitive feasibility study confirms Bandanna’s confidence in continuing to progress development of the project,” said MD Michael Gray.

“The study demonstrates the extremely competitive cost position of the project compared with much existing and planned thermal coal production in Australia and globally. In addition, the study confirmed that the capital intensity of the project was substantially lower than other proposed major thermal coal projects in Australia.”

Gray said Bandanna had witnessed significant improvements in prices for construction elements of the project, over recent months, and added that the company would continue to work closely with the key contractors and suppliers to further optimise the contract packages and equipment supply offers, prior to project execution.

“With the announced delays to many other new projects, Bandanna is confident that it will be producing coal at world-competitive cost, in a market of increasing demand and limited new supply.

“Springsure Creek remains the only greenfield thermal coal project in Australia for which port and rail capacity is fully contracted and under construction,” he added.

Meanwhile, Gray noted that, over the last six months, Bandanna had been in ongoing discussions with a shortlist of interested parties in relation to both offtake and equity investments in the project.

The company was also progressing approvals for the project, and had submitted a draft environmental-impact assessment to the Queensland government for review.

It was expected that the public submissions period for this document would take place in the first quarter of this year.