The project management team working for both 50:50 JV partners had stitched up deals to secure 4 million tonnes per annum of port and associated rail capacity to export through Abbot Point in 2013, but Vale unexpectedly pulled out of the arrangements in January.

While Vale favours a port allocation from a proposed expansion of the Dalrymple Bay Coal Terminal, Aquila does not expect this additional capacity to be available until late 2016 at the earliest.

Consequently Aquila started legal proceedings in March and is seeking damages from Vale for the expected income from longwall mining at Eagle Downs from 2013.

Aquila is also seeking a declaration that Vale has committed a default under the JV agreement for the project.

Work is still continuing on the project’s definitive feasibility study but rail and port agreements need to be locked in before it can be sufficiently completed.

In its recent quarterly report, Aquila said an expression of interest was lodged for the second expansion of the planned Wiggins Island Coal Export Terminal, which is scheduled to start shipping in 2015-16.

The Perth-based company added that investigations for interim capacity from 2013 to the availability of new port capacity had continued over the past months.

In a separate legal stoush over the Belvedere hard coking coal project in the state, Vale has challenged the market valuation Aquila commissioned for its 24.5% stake in the project.

Vale already paid $US92 million for private resources company AMCI’s 24.5% share of the project in June and was hoping to get a similar deal from Aquila.

But given the high acquisition figures in the Australian coal space this year, Aquila wants a higher price for its stake in the project which holds 3.87 billion tonnes of resources.

Aquila said the matter was being progressed to a court hearing in 2011.

Isaac Plains

While Vale and Aquila have legal disputes over two shared projects, their 50:50 Isaac Plains mine in the Bowen Basin recently set a new quarterly record with saleable coal production of 685,000 tonnes.

This was a 2% increase from the 2009 September quarter, but the open cut mine is approved to expand to 4 million tonnes per annum of raw coal output and the second dragline remains on track to start up in the June quarter of 2011.

The mine produces a mix of metallurgical and thermal coal, but coking coal production dipped 39% from the previous quarter to 74,053t.

Washpool and Talwood projects

Aquila’s wholly owned Washpool coking coal project recently received a 1.6Mtpa port allocation from the first stage development of WICET which is expected to start shipping in 2014.

The open cut project is northwest of Blackwater in the Bowen Basin, and is on track to kick off production in 2013 for a mine life of 25 years.

A definitive feasibility study is underway, while Aquila has applied for a mining lease over the project area while work on the environmental impact statement continues.

Previously known as the Redhill project, Aquila’s wholly owned Talwood project could shape up into another future underground coal mine for the company.

Located northwest of Moranbah and next door to BHP Billiton Mitsubishi Alliances’ Goonyella Riverside open cut mine, the project concept study is underway and due in the June quarter of 2011.

Aquila plans to submit a mining lease application for the project area in the next two months.

Aquila shares closed down 32c or 3.6% to $8.53 yesterday.