The result, which compares with the loss of $1.1 million for the previous corresponding period, was based on coal sales of $75.5 million for the half from its Isaac Plains coal mine in Queensland.

Isaac Plains enjoyed a record sales performance for the half year, delivering an EBITDA of $15.4 million. The company also reported a new record sales tonnage from the mine of 1.4 million tonnes compared with 660,000t in the previous corresponding half.

“EBITDA from the Isaac Plains Coal Mine is expected to be significantly higher in the second half of the current financial year due to forecast increases in both metallurgical and thermal coal prices,” the company said.

“There is also a continued focus on achieving further efficiencies as a result of the appointment of new mining contractor John Holland, who is now operating in conjunction with the coal handling and preparation plant manager, Ascentis, the mining services division of Ausenco.”

A feasibility study of the Eagle Downs hard coking coal project is based on development of a multi-seam longwall mine, producing initially up to 4.6Mtpa of hard coking coal from one longwall and up to 8Mtpa of hard coking coal should a second longwall be installed.

The company has upgraded the JORC resource statement and released of an initial reserve statement for Eagle Downs.

Eagle Downs is owned by the Bowen Central Coal Joint Venture – a 50:50 joint venture between Aquila Coal and Vale subsidiary Bowen Central Coal.

Earlier this week Aquila Coal issued Bowen Central Coal with a default notice under its joint venture agreement over infrastructure requirements for Eagle Downs.

Aquila wants to export out of Abbot Point and commit to partially funding the Goonyella Abbot Point expansion project to link Eagle Downs to the port. However, joint venture partner Vale has proposed alternative plans, which could delay coal production from Eagle Downs, according to Aquila.

Meanwhile, Aquila has also made progress towards a pre-feasibility study to establish a multi-longwall mining operation at the Belvedere hard coking coal project, targeting production of up to 9Mtpa of hard coking coal.

Vale holds options to acquire the Aquila’s remaining interest in this project at fair market value, with the first option period having commenced in December 2009 and running until June 2010.

Aquila has begun a feasibility study for the Washpool hard coking coal project, a planned 4Mtpa mining operation, producing approximately 1.6Mtpa of hard coking coal, which is scheduled for delivery by June 2010.

On the iron ore front, it has made progress on the definitive feasibility study for the West Pilbara Iron Ore Project, with engineering works 85% complete at period end. This project is based on a current measured, indicated and inferred iron ore resource of 742Mt, with a projected production rate of 30-40Mtpa from a proposed new 275km railway to and new port development at Anketell Point.

Aquila has also signed further memoranda of understanding with steel mills in China, Japan and South Korea for the testing of iron ore products, bringing the total of such non-binding agreements to twenty-two.

Turning to mangangese, Aquila has completed over 8,000m of drilling on the Avontuur manganese project in South Africa during the period, with encouraging high-grade results achieved. The drilling programme is designed to increase the size and upgrade the current JORC classification of the existing 34.3Mt manganese resource.

The company has finalised an agreement with Baosteel which has invested $285.6 million in Aquila, which is 15% of the expanded issued share capital of the company.

Aquila and Baosteel signed a memorandum of strategic co-operation under which Baosteel may directly invest in certain of the company’s projects, jointly market a proportion of Aquila’s coal and iron-ore products in China, and enter into direct long term supply agreements for Aquila’s coal and iron ore products, and assist with the sourcing of low cost financing from Chinese financial institutions for the development of Aquila’s projects.

“Following the successful investment by Baosteel, the company is in a very strong net asset

position leaving it well placed to continue to fund the feasibility, and ultimate development, of its pipeline of projects,” the company said.

Aquila was trading steady this morning at $9.59.