Eagle Downs plans to slash workforce

THE Eagle Downs hard coking coal project in Queensland – owned by an Aquila Resources and Vale joint venture – will begin axing staff in response to the downturn in coal prices.
Eagle Downs plans to slash workforce Eagle Downs plans to slash workforce Eagle Downs plans to slash workforce Eagle Downs plans to slash workforce Eagle Downs plans to slash workforce

The Eagle Downs project area. Courtesy Aquila Resources.

Lou Caruana

Aquila chairman Tony Poli said the measures would be temporary as the mine targeted a construction completion date of 2016.

“Eagle Downs Coal Management has been developing the project’s approved program and budget for FY2014 and will present it for approval to Aquila Coal Pty Ltd and Vale SA’s wholly owned subsidiary, Bowen Central Coal Pty Ltd, later in the week,” he said.

“In recognition of the current commodity price environment, the participants have requested the manager focus on the critical path development tasks and re-prioritise some of the scheduled early works, in order to prudently manage project expenditure.

“In line with the revised work program, the participants have accordingly resolved to reduce the workforce for the time being.”

Construction on site has continued, with civil works around the portal drift access and site dams underway.

The project has an estimated mine life of 47 years for all target seams and is scheduled to be under construction until late 2016, according to Aquila.

Eagle Downs Coal Management re-tendered the contracts at the mine in March because of the tougher operating environment in the industry.

The company, which sold its 50% stake in the Isaac Plains coal mine for $430 million, is scaling back its coal investment as it seeks to develop its iron ore operations in Western Australia.

“[The company] has re-tendered major contracts for the Eagle Downs hard coking coal project to reflect the cooling market for coal mining and construction services in Queensland,” it said.

“Execution of major contracts arising from this process is expected in the second half of FY13.”

Isaac Plains delivered Aquila $30.7 million in profit in the six months to December 2011.

Construction of the Eagle Downs hard coking coal project is underway, with project completion targeted for the end of 2016, it said.

In the six months to December, the company completed the electricity substation, construction of employee housing, and management of the gas drainage wells.

Aquila said last February that the company had reached an agreement with Brazilian giant Vale after a protracted dispute on a $150 million valuation for a 24.5% interest in the Belvedere coking coal mine in Queensland.

Vale has agreed to take up the option and pay Aquila the $150 million as well as settle all Belvedere litigation and disputes with Aquila for $20 million.