Reserves boosted at Eagle Downs

AQUILA Resources and 50:50 joint venture partner Vale Australia have lifted the proved and probable reserves at the Eagle Downs hard coking coal project by 61% to 254 million tonnes, but the Bowen Basin project still lacks rail and port agreements.
Reserves boosted at Eagle Downs Reserves boosted at Eagle Downs Reserves boosted at Eagle Downs Reserves boosted at Eagle Downs Reserves boosted at Eagle Downs

Image courtesy of Aquila Resources

Blair Price

The upgraded reserves, with more than 80% in the proved category, give the project enough scope for a 47-year mine life based on a single longwall operation.

There is also the potential to bring in a second longwall to increase product coal output from 4.6 million tonnes per annum to more than 7Mtpa.

For proved run-of-mine reserves, the Harrow Creek upper seam hosts 60.1Mt, the Harrow Creek lower seam holds 91.1Mt, and the Dysart seam has 55.4Mt.

Rail and port for Eagle Downs

Aquila started legal proceedings against Vale last year, as Vale unexpectedly pulled out of arrangements to secure 4Mtpa of port and associated rail capacity to export through Abbot Point in 2013.

The definitive feasibility study for the project cannot be completed until a logistics solution is found.

“To this end, the project has applied for capacity at the Wiggins Island, Dalrymple Bay and Abbot Point expansions,” Aquila said.

“The process of project due diligence for Wiggins Island stage 2 capacity, which is the next available capacity of the three options (but will not be available until at least 2015-16), is expected to be completed during the next quarter.”

Aquila is seeking damages from Vale for the expected income from longwall mining at Eagle Downs from 2013.

The project is located just 7 kilometres away from BHP Billiton Mitsubishi Alliance’s Peak Downs open cut mine, which is well known for its quality hard coking coal.

Aquila shares closed up 5c to $9.76 yesterday.

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