Stanmore Completes Wotonga Coal Deal


Power Generation - Sep 8, 2015

Australian mining firm Stanmore Coal has completed its acquisition of the Wotonga deposit in Queensland from US coal producer Peabody for A$7mn ($4.9mn). It expects to complete its purchase of the adjacent Isaac Plains coking and thermal coal mine by the end of next month.

Stanmore has renamed Wotonga as Isaac Plains East. It plans to use the deposit as an extension to the existing Isaac Plains mine, which it agreed to buy from Brazilian mining firm Vale and Japanese trading house Sumitomo for just A$1.


Related Research on ASDReports.com:
Global High Capacity Gas Generator Market 2017-2021

It plans to restart production at Isaac Plains in next year's first half at a 1mn t/yr production rate, compared with peak output of 2.8mn t/yr before the mine was placed on care and maintenance at the end of last year. Stanmore will use the Wotonga deposit to extend Isaac Plains and help reduce costs. Isaac Plains has a possible open-cut mine life of three years at current spot coking coal prices, Stanmore said, but developing the Wotonga coking coal deposit can extend this.

Stanmore agreed to assume all outstanding contracts, including transport infrastructure access arrangements, as part of its acquisition of Isaac Plains. These include around 1.1mn t/yr of take-or-pay rail and port obligations.

The Isaac Plains and Wotonga deals are partly financed by Australia-based fund manager and private equity firm Taurus Mining, which agreed to lend Stanmore $42mn at an interest rate of 10pc/yr for two years.

About 50pc of Isaac Plains' production was sold as a semi-soft coking coal product in the last two years, with about a quarter sold as semi-hard coking coal and the balance sold as thermal coal. Stanmore plans to re-engage with former steel mill customers in Japan, South Korea and Taiwan ahead of the mine's restart.

Isaac Plains has its own coal handling, preparation and processing facilities and rail access infrastructure. It transports coal 172km by rail to the Dalrymple Bay Coal Terminal.

Source : Argus Media

Published on Global Energy World: Sep 8, 2015

 
zpsk