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World Coal
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June 2016
Coal News
Coal News
Q
ueensland Premier Annastacia
Palaszczuk has officially
reopened the Isaac Plains coal mine after
the mine was brought back to life by
new owners, Stanmore Coal. Stanmore
bought the mine for AUS$1 last year,
taking formal ownership in November.
Since then, the company has restarted
production operations, shipping its
first coal earlier this month to Asian
steelmakers and creating 150 direct jobs in
the process.
“We have gone against the tide in the
coal sector to create value for our
investors and the central Queensland
community,” said Stanmore’s Managing
Director, Nick Jorss. “We believe we’ve
picked the right point in the cycle to shift
from explorer to exporter with operating
costs reduced by 35%.”
Isaac Plains will produce
1.1 million tpy of metallurgical coal,
transporting the coal on the Goonyella
Rail Line to Dalrymple Bay Coal Terminal
for export to Asian steel mills.
As well as the mine, Stanmore also
owns the adjacent Isaac Plains East
deposit, which it bought from Peabody in
July 2015. The company recently updated
its JORC-compliant coal resources and
reserves at Isaac Plains and Isaac Plains
East to 76.9 million t and 15.7 million t,
respectively.
In her remarks at the opening,
Palaszczuk said the Isaac Plains success
demonstrated that investors still had
confidence in Queensland and its
resources sector. “We have new faces, like
Stanmore Coal, and new investors who are
calling the bottom of the market, stepping
up and creating jobs,” Palaszczuk said.
“Our government supports the
sustainable development of our resources
for the jobs and economic development
this offers,” added Queensland Minister
for Natural Resources and Mines,
Dr Anthony Lynham. “We will keep
working hard to support companies, like
Stanmore Coal, turn their plans into
reality.”
Lynham pointed to the 50%
exploration expenditure discount,
ongoing royalties freeze and low payroll
taxes as measures the Queensland
government had taken to support “the
green shoots” in the mining sector. He
also highlighted the role of the
Coordinator-General in cutting red tape
for support business “as has happened
here at Isaac Plains.”
The Queensland Resources Council
(QRC) also welcomed the official
re-opening of the mine. QRC Chief
Executive, Michael Roche, called the
restart of operation at the mine a shot in
the arm for an industry that has been hit
by decade-low commodity prices.
“The official opening is big news for
the Bowen Basin in what have been
gloomier times for the once booming
sector,’ Roche said. “Since acquiring the
mine in August last year, Stanmore has
created more than 150 direct jobs for the
community and will inject
AUS$7 million annually into the state’s
royalty revenues.”
Roche also welcomed the attendance
of Palaszczuk at the re-opening
ceremony as acknowledgment of the
value the mining sector brings to the
state and its economy. According to
Roche, the state government received
AUS$2.1 billion in royalties from the
resources sector last financial year.
“The state collects zero royalties from
mines that close and from projects that
are cancelled. The mine that would not
have otherwise produced any money for
the state’s coffers, will now inject
AUS$7 million every year,” Roche said.
P
aringa Resources has amended
its coal sales contract with
utilities, Louisville Gas and Electric
(LG&E) and Kentucky Utilities (KU),
following the company’s recent
change in strategy to develop the
Buck Creek No.2 mine first, ahead of
the Buck Creek No.1 3.8 million tpy
coal project.
In October 2015, Paringa signed a coal
sales agreement with LG&E and KU to
deliver coal from the No.1 mine. In
February 2016, the company decided to
develop the No.2 mine first after it
received the results from a scoping
study, which demonstrated the No.2
mine to be a high-margin 1.8 million tpy
mine with low CAPEX of only
US$44 million.
As a result, the amended cornerstone
coal sales agreements with LG&E and
KU now reflect delivery of coal from the
No.2 mine. The amended contract is on
substantially the same terms as the
original contract with coal volumes and
coal specifications unchanged. Fixed sale
prices have changed slightly to reflect
recent sales data and the project
development milestones and delivery
schedule have been updated for the
No.2 mine.
Paringa expects to start construction
of the No.2 mine during 2Q17, begin
production by mid-2018 and reach full
production of 1.8 million tpy during
2019.
AUSTRALIA
Stanmore Coal’s Isaac Plains mine officially re-opened
USA
Coal sales contracts amended to reflect Buck Creek No.2 priority development
