The deal involves CVRD paying out $51.23 million to subsidiaries of Aquila Resources and AMCI Holdings Australia, which currently hold equal shares in the project.

The Brazilian iron ore giant also has the option to buy the remainder of the project at a later date.

Since 2005, CVRD has been conducting a $A17 million exploration study on the Belvedere project assessing the geological structure, coal resource, product quality and underground mining conditions at the site.

It also investigated the potential mining, processing and logistical requirements for the proposed multi-longwall mining operation.

Meanwhile, Aquila and AMCI are in court over the joint venture terms of the Belvedere and Australian Premium Iron Ore projects, with both companies lodging separate proceedings on the matter.

The dispute began in February when CVRD bought AMCI, and restructured AMCI's interests in the API Joint Venture and the Belvedere Coal Joint Venture, in which two Aquila subsidiaries respectively hold 50% joint venture interests.

In April, Aquila executive chairman Tony Poli told International Longwall News that AMCI's restructure had resulted in a change in control under the JV agreement, and triggered an option for Aquila to acquire the iron ore and coal interests.

“If Aquila is successful in this matter, it will obtain an option to purchase the AMCI interests in both the Australian Premium Iron Joint Venture and the Belvedere Coal Joint Venture, at a price to be determined by an independent expert as at the date of change in control, being February 26, 2007,” the company said.

The outcome of the litigation will not affect transfer of the 51% interest in the Belvedere Coal Joint Venture, or CVRD’s right to ultimately acquire the remaining 49% interest in the future.