The JV gives local Brazil subsidiary Vale Belvedere an option to acquire the 24.5% interest in the Belvedere project owned by Aquila’s subsidiary BD Coal, but the two parties cannot agree on a fair value for the project, with two different valuations being offered by BD Coal.

BD Coal’s nominated valuer, an “international investment bank ranked amongst the top-ten investment banks globally on the basis of transactions worldwide in the mining sector over the past two years”, does not comply with the terms of the JVA and therefore, in Vale Belvedere’s opinion, does not qualify as a valuation for the purposes of the fair-market-value determination process, Aquila said in a statement today.

“Vale Belvedere has indicated that its position is that the fair-market-value determination process must be deferred until the outcome of those proceedings is known,” Aquila said.

“BD Coal’s preliminary view is that Vale Belvedere’s assertions essentially constitute differences of professional opinion on matters of valuation. BD Coal is disappointed that time and money will be expended in hearing this matter in the courts rather than following the process for the resolution of differences in the two valuations that the parties agreed when they entered into the JVA.

“BD Coal intends to vigorously defend the proceedings.”

Aquila said BD Coal tried without success to jointly appoint a valuer with Vale Belvedere after a first valuation for Belvedere on August 20, 2010 differed by more than 10%.

It is believed Vale would like to pay less than $100 million for Aquila’s stake in the project, and announced the purchase of private company AMCI’s 24.5% stake for $US92 million in June.

However, Aquila believes the stake is worth a lot more, given the value of a number of recent coal asset sales.