PERTH (miningweekly.com) – ASX-listed Wesfarmers has signed a A$70-million deal with Peabody Energy to acquire a mineral licence adjacent to its Curragh and Curragh North mines, in Queensland.

The mining lease is estimated to contain 67-million tonnes of coal reserve within a total coal resource of 255-million tonnes.

Wesfarmers said on Monday that the acquisition would augment the total base of coal reserve potentially available for mining and processing at Curragh by around 29%. It would also extend the project’s mine life and provide future options to further optimise mine operations.

MD for the company’s resources division, Stewart Butel, said that the acquisition of the mineral development licence reflected the company’s confidence in the longer-term outlook of Curragh’s export coal business.

During the three months to December, the Curragh mine produced 2.94-million tonnes of coal, including two-million tonnes of metallurgical coal and 912 000 t of steaming coal.

This was a 3.9% increase on the previous quarter, and reflected improved plant performance during the quarter.

For the 12 months to December, the Curragh mine saw a 5.7% decrease in metallurgical coal production, to 7.54-million tonnes, which the miner said reflected the impact of significant wet weather associated with Cyclone Oswald early in 2013.

At the Bengalla mine, Wesfarmer’s share of production reached 797 000 t during the quarter ended December, down 10.2% on the previous quarter owing to the mine operating in a less productive section.

Meanwhile, Wesfarmers also reported that price negotiations for the next quarter, ending March, had been completed with its major customers.

For the January to March quarter, the weighted average free-on-board contract prices for Curragh metallurgical coal would decrease by around 5% compared with the December quarter prices.

The miner said that some 75% of deliveries in the March quarter were forecast to be at the new contract prices, with the balance at carry-over prices, and subject to actual contract deliveries for the March quarter.