NATHAN Tinkler will apply to the NSW Government for a 20-year licence to run an open cut coal mine at the former Dartbrook underground mine after confirming a bid for an 83.33 per cent share in the former Anglo American operation.
Subscribe now for unlimited access.
or signup to continue reading
The move was to “ride on the demand” for low cost, high quality coal in a world demonstrating increasing concerns about greenhouse emissions, he said in a statement to the Australian Stock Exchange on Tuesday.
The controversial chief executive officer of Australian Pacific Coal has told the stock exchange the company has until January 31 to secure sufficient funding of $25 million cash to complete the acquisition by mid-year, or pay a break-even fee of $1 million if it fails to meet the deadline.
Anglo ran Dartbrook as an underground mine but plans have been afoot for some years to run it as an open-cut operation. Australian Pacific Coal told the stock exchange that it expected the application to be “favourably considered due to the approvals of adjacent existing open cut mines”.
Anglo announced the sale in a statement to the London Stock Exchange on December 24 that it entered into a “sale and purchase agreement” to sell its 83.33 per cent share in the Aberdeen mine to Australian Pacific Coal. Anglo’s partner in Dartbrook, Marubeni Corporation of Japan, has to approve the deal for it to go ahead.
If Australian Pacific Coal pays the $25 million, the second half of the $50 price tag is to be paid through royalties to Anglo out of coal sales.
Dartbrook underground mine has been in care and maintenance since 2006.
Australian Pacific Coal told the stock exchange that re-opening the mine for an open cut operation represented “a unique opportunity to acquire a tier 1 asset that is not only strategically located, but also well-equipped with existing infrastructure and facilities”.
“We firmly believe in the resilient demand for high energy low ash thermal coal, as concerns about greenhouse emissions increase,” the company said.
“Thermal coal will remain one of the core sources for energy production and if we can position this asset to be in the lowest cost quartile we are well placed to ride on that demand.”
Dartbrook represented “a rare opportunity to acquire a large scale, underexploited thermal coal asset”.
The low sulphur Dartbrook coal “enhances the marketability of the product through blending with other less desirable higher sulphur Hunter Valley coals”.
Australian Pacific Coal will apply to mine five million tonnes of coal per year. Existing infrastructure and facilities would substantially reduce development costs, he said.
There were no “take or pay” rail contracts in place that would require funding during development, he said.
Australian Pacific Coal would replace $7.7 million in financial assurances relating to the Dartbrook mining tenaments, and Marubeni would release Anglo American from any future liability over the mine, the stock exchange was told.
The company expected an approved mine to employ 250 people.
