Isaac Plains performs despite Qld floods

INTERRUPTIONS caused by the Queensland floods could not stop Aquila Resources increasing the annual gross profits from its 50%-owned Isaac Plains coal mine by 165% to $A29.7 million year-on-year thanks to higher prices for metallurgical and thermal coal.
Isaac Plains performs despite Qld floods Isaac Plains performs despite Qld floods Isaac Plains performs despite Qld floods Isaac Plains performs despite Qld floods Isaac Plains performs despite Qld floods

Aquila Resources and Vale Australia's Isaac Plains mine.

Lau Caruana

Aquila’s share of revenue from Isaac Plains coal sales rose by 3% to $133.5 million despite volumes dropping to 1.56 million tonnes per annum compared with 2.48Mt in the 2010 financial year.

Isaac Plains Coal Mine has insurance cover which extends to business interruption and damage to equipment arising from flood events. Aquila says it is compiling the information to support a significant insurance claim.

The Isaac Plains dragline was successfully brought into operation late in the financial year, having been delivered within budget and with only minor slippage to the original timetable.

The mine’s continued strong safety performance was maintained, with a no lost-time injuries reported.

Overall, the diversified miner reported a full year loss of $64.5 million for the 12 months to June 2011, almost double the figure reported for the previous financial year.

“The net loss after income tax … reflects the company’s accounting policy of expensing expenditure incurred in respect of exploration and feasibility activities as the company continued to undertake significant exploration and progressed feasibility studies for four projects,” it said in a statement.

A study for Aquila’s 50%-owned Eagle Downs hard coking coal project in Queensland was delivered late in the 2011 financial year.

A full definitive feasibility study is not able to be completed as the project is yet to secure port and rail capacity and firm off take arrangements. The study found the project is technically and financially viable, based on initially securing rail and port capacity at Wiggins Island Coal Export Terminal Stage 2.

Legal action is continuing against joint venture partner Bowen Central Coal, a subsidiary of Brazilian group Vale, in relation to that company’s 2010 decision not to support the offer of port and rail capacity that was made available to the Eagle Downs Hard Coking Coal project.

Eagle Downs has an estimated mine life of 47 years and a total JORC-compliant resource of 959Mt and a reserve of 254Mt run-of-mine coal.

The mine, once constructed with the longwall installed in the Harrow Creek Upper Seam, will produce an average of 4.5Mtpa of hard coking coal over the initial ten years of production.

“The coal product has been assessed as low volatile, standard-grade hard coking coal and the brand is expected to be well received in the global metallurgical coal market,” Aquila said.

A definitive feasibility study for Aquila’s Washpool hard coking coal project has also been delivered, which has confirmed the technical and economic feasibility of the planned 2.6Mtpa open cut operation over 15 years.

Last week the Supreme Court of Queensland struck out in its entirety the statement of claim made by Vale Belvedere, a subsidiary of Vale, in relation to valuation of Aquila’s 24.5% interest in the Belvedere hard coking coal project.

Vale has lodged an appeal in respect of this decision which is scheduled to be heard by the Court of Appeal of the Supreme Court of Queensland on September 28, 2011.