Cockatoo Coal pushes ahead with Baralaba expansion
PERTH (miningweekly.com) – Junior coal miner Cockatoo Coal was pushing ahead with expansion plans for its Baralaba project, in Queensland, despite the deteriorating market conditions.
The miner recently completed the first phase of the Baralaba expansion project, which saw coal production increase to one-million tonnes a year at its Baralaba North operation.
The company was now pushing to increase production to 3.5-million tonnes a year, and had submitted its environmental-impact statement to Queensland authorities.
A 2013 bankable feasibility study estimated that a capital injection of A$311-million would be required to expand production to 3.5-million tonnes a year.
Cockatoo subsequently secured a A$255-million project finance facility from ANZ and a A$60-million capital raise to fund the development of the project.
Cockatoo said on Friday that the company and its joint venture partners in the Barabala project were currently in advanced discussions regarding the future direction and funding of the project.
Furthermore, Cockatoo, its two major shareholders Noble Group and SK Networks and principal bank ANZ were in advanced negotiations around the release of up to A$37-million of restricted cash, which was provided for infrastructure guarantees.
The release of the restricted cash would be a critical element for the funding plan, Cockatoo said.
The miner told shareholders that despite the current market conditions, the outlook for the coal sector in the medium- to long-term remained positive, adding that the expansion of the Baralaba mine should place Cockatoo in a strong position to take advantage of a future upturn.
The company added that it had been diligent in optimising and deferring capital expenditure to preserve cash reserves where possible, and had been taking advantage of the competitive contracting market.
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