Bowen Coking Coal is bullish on the future of metallurgical coal as it drives two key Queensland projects towards ‘shovel-ready’ status as quickly as possible.
The company made major announcements last week on advances at the Broadmeadow East and Isaac River coking coal projects in the Moranbah region.
Both would be open-pit operations using contract mining and each could generate around 150-200 ongoing jobs.
Bowen Coking Coal managing director Gerhard Redelinghuys said the news of early commercial completion of the Broadmeadow East acquisition demonstrated the company was serious about the project and was expediting its development.
The $2.5 million deal with Peabody includes access rights to the New Lenton Joint Venture coal handling and preparation plant and a rail load-out facility.
“That’s the big attraction of this project – it will not require a significant amount of capital expenditure,” Mr Redelinghuys said.
“We are looking at a typical contractor operation and we don’t need to build a lot of infrastructure, it’s already part of the transaction, and we’ve already agreed the land access compensation as well.”
With a granted mining lease already in place, the major approvals issue now affecting project timing is the requirement for an amendment to the environmental authority – a process expected to take roughly 12 months.
This should be quickly followed by a final investment decision on what Mr Redelinghuys described as a low capex project to bring intro production.
Depending on the environmental approvals, first coal is expected within the next 18 to 24 months.
Broadmeadow East boasts an estimated resource of 33 million tonnes of metallurgical coal, with a fully explored open pit area hosting 11Mt shallower than 100m deep.
The company expects Broadmeadow East to be the first of its portfolio of projects to come online, although Isaac River may follow closely (subject to permitting) and run concurrently.
Bowen Coking Coal lodged a mining lease application for its Isaac River project in March, followed by its environmental authority application last week.
“The whole strategy for Bowen Coking Coal is to get into production as soon as possible – that is our strategy,” Mr Redelinghuys said.
Among its other assets is the Hillalong project, where Japanese conglomerate Sumitomo Corporation has agreed to spend up to $7.5 million on exploration to earn up to 20 per cent of the project.
Prices on the uptick
The projects are surging ahead at the same time as an uptick in prices for hard coking coal.
“We have a bullish view. We think we’ve seen a good correction in the prices over the last month or so,” Mr Redelinghuys said.
“The last prices I saw had hard coking coal around $US139 a tonne, with futures for early next year over $US150 already. The fundamentals for hard coking coal are very solid and Australia is in a really good position to capitalise on that.”
It was an exciting time for Bowen Coking Coal, he said.
“The company is focused on coking coal in the best place for coking coal in the world, which is the Bowen Basin. The projects are advanced and we have essentially three open-pit projects which are easily accessible, low-capex options and we have an exceptional team who have done this before.”
They include a number of former executives of Stanmore Coal, which was able to bring Isaac Plains back into profitable production, including Neville Sneddon and Nick Jorss.