It follows news from Rio Tinto that it would not be participating in the expansion of the Abbot Point coal terminal in Queensland because “global economic markets have shifted to a period of significant uncertainty”
Cockatoo, which produced 256,955 tonnes of coal from its Baralaba coal mine in Queensland in the six months to December 2011, is now expected to dilute its shareholders’ stake in the company and go cap in hand to the market to fund further capital expansion.
“SK Networks has advised the company that after much discussion by its board it has made the decision not to proceed with its proposed $313 million placement,” Cockatoo said in a statement.
“SK Networks has informed the company that the decision was based on prioritisation of investment opportunities and investment requirements contemplated by SK Networks and the ongoing uncertainty in global markets.”
Cockatoo said a $150 million loan facility from KEBA, which was partially drawn down on March 30, 2012 to repay Cockatoo’s previous $85 million loan facility from Credit Suisse AG, Singapore Branch and Macquarie Bank, had a maturity date of December 28, 2012 and was unaffected by the SK Networks’ proposed placement not proceeding.
“The continued strong production performance from Cockatoo’s Baralaba mine and the remaining $80 million undrawn portion of the KEBA loan facility will provide the company with liquidity to fund its potential commitments and continue to achieve milestones through the development of its projects,” it said.
Baralaba was restored to full operations following flooding in early 2011 and achieved a record production of 62,383t in December 2011, more than 90% of which was pulverised coal injection coal.
The Queensland government invited residents to have their say on the draft terms of two of Cockatoo’s proposed thermal coal mines in the Surat Basin.
The proposed operations include the Taroom project 3km south of Taroom in Banana Shire and the Collingwood project 12km northeast of Wandoan in the state’s Western Downs region.
State development, infrastructure and planning minister and deputy premier Jeff Seeney confirmed the coordinator-general would accept public submissions on the draft terms of reference for the two projects, which would in turn frame their environmental impact statements.