Landowner helps end Springsure Creek project

QUEENSLAND Resources Council CEO Michael Roche has given one “stubborn landowner” some credit for the downfall of Bandanna Energy.

Blair Price

With negotiations on restructuring a Credit Suisse loan facility failing, the board of the Queensland coal explorer put it into voluntary administration last week.

Bandanna chairman John Pegler blamed the delayed approval of the Springsure mining lease plus the decline in thermal coal prices.

Roche told Central Queensland News that he felt for Bandanna’s management, which had brought the project close to fruition only for it to be stymied by “one stubborn landholder, delays in state government approvals, pitiful coal prices and out-of-patience investors”

“There has been some gloating – surprise, surprise – in the Twitterverse," Roche said.

"I care more about the good folk of the Central Highlands who desperately want some good news out of the coal sector and Bandanna had the makings of that good news.

"An enormous effort had gone in to win the trust of so many landholders, investment in [agricultural] research, their research committee that I think it will be in the future a great test case for underground mining and agriculture."

Landholder Services consultant George Houen, who represented two of the landholders in an ongoing Land Court case against Bandanna, told the newspaper that Bandanna’s voluntary administration was good news from his clients’ point of view.

He warned that any possible buyers of Bandanna’s three mining lease applications would also face risks.

“Any prudent buyer would have to be aware it is very controversial in respect of its effect on prime ag land and with the court hearing still to go, there would have to be some uncertainty that it wouldn't make it easier to sell," Houen said.

"There is no way we can have a clear picture of what happens from here and we'll just have to keep on looking at ways to take advantage of what has happened."

Roche remained confident that "in some shape or form we will see a project proceed at Springsure Creek".

Bandanna previously flagged starting construction of Springsure Creek in the September quarter of 2014, with first development coal expected in 2015.

The southern Bowen Basin thermal coal project was initially targeting 5.5 million tonnes per annum of capacity with first longwall coal expected in the second half of 2016.

Explorer Acacia Coal has also been affected by Springsure Creek issues, having previously delayed its Comet Ridge project, which is targeting 350,000tpa of coking and thermal coal.

“Acacia has an agreement with Bandanna for the Comet Ridge project to access the Triumph Creek train loading facility, part of the Springsure Creek infrastructure proposed to be sited on Acacia’s tenement,” it said in late July.

Acacia had since said it was considering an urgent meeting with Bandanna’s appointed administrators from PPB Advisory.