The project – which involves construction, development and operation of an underground longwall hard coking coal mine over an estimated mine life of 47 years for all target seams – now has a budget of $97.2 million, Aquila executive chairman Tony Poli said.
“In light of continuing softness in the coal price environment, the participants requested Eagle Downs Coal Management Pty Ltd focus on critical path development tasks and reprioritise some of the scheduled early works,” Poli said.
“In response to this request, the manager has presented the participants with a work program and budget for FY2014 of $97.2 million, which has now been approved by the participants.
“The manager has advised the participants that the overall construction schedule will be slightly impacted, with its previously anticipated completion date of November 2016 now being revised to H1 CY2017.”
Aquila announced earlier this week that Eagle Downs would be cutting back on staff in response to the downturn in coal prices.
But the drop in the Australian dollar is making the project look more attractive, according to Poli.
“Aquila notes that short-term deferral of non-critical path expenditure has the potential to considerably improve the economics of the project, if contracts can be executed in a lower cost environment,” he said.
“Aquila also considers that the recent overdue correction of the Australian dollar, to realign with reduced commodity prices, is likely to provide an additional positive boost to the economics of the project.”
Eagle Downs Coal Management re-tendered the contracts at the mine in March because of the tougher operating environment in the industry.
Construction on site started with the establishment of site access via a 6km sealed all-weather road, construction of mine offices, site civil works, construction of the Powerlink substation for provision of site power and establishment of the initial gas drainage system, according to the company.
The excavation of the box cut for the construction of the portal access to the mine drifts started in February.