Weather affects Aquila sales

AQUILA Resources has blamed the wild wet season and the long-running dispute with Isaac Plains joint venture partner Vale for coal sales from the mine dropping 23% during the June quarter.
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Aquila Resources and Vale Australia's Isaac Plains mine.

Lauren Barrett

The Isaac Plains coal mine, which is 50% owned by Aquila, only managed to produce 364,828 tonnes of saleable coal in the June quarter due to weather impacts on stripping and mining affecting run-of-mine stocks.

Coal sales from the mine totalled 280,728 tonnes of coal in the second quarter, well down from sales in the corresponding period.

Aquila attributed the losses to adverse weather conditions and recovery from flooded pits as well as the interruption caused by the marketing and transporting dispute with Vale.

Aquila said a temporary agreement with Vale would get Isaac Plains back to full scale production in the next quarter.

“Subsequent to the end of the quarter an agreement was reached with Vale which effectively put the matters in dispute to one side until 31 March, 2012 to allow Vale and Aquila to continue to pursue a longer-term resolution,” Aquila said.

“In the meantime normal coal shipments will resume and the mine is ready to produce at its 2.8 million tonnes per annum in the next quarter.”

The agreement between the companies will allow normal shipments from Isaac Plains to resume after the dispute caused shipments to be cancelled and stockpiles at the mine to reach capacity.

While flagging sale and production results from Isaac Plains dominated the second quarter, operations at the mine continued during the quarter in all southern pits, with pumping and mud removal operations ongoing from the N1 pit.

An insurance claim covering both property damage and business interruption due to the adverse weather events is in process.

Meanwhile, a new study at Aquila’s Eagle Down’s coking coal project has found the mine will produce an average of 4.5Mtpa of hard coking coal.

The project, which has an average mine life of 48 years, has an estimated capital cost of A$1.25 billion.