IMC, which owns bulk vessels and coal loading facilities throughout Asia, is investigating building two or more coal terminals in China for the import of Australian coal, including the Ashton brand.

IMC will pay Felix a cash component including $A20.4 million in the next few weeks and $A10 million when underground longwall development commences. IMC will also commit to arrange $A75 million in project financing for the underground development.

Ashton, in New South Wales’ Hunter Valley, is a joint venture with a wholly owned subsidiary of Itochu Corporation. The sale will reduce Felix’s stake in the project from 80% to 60%.

Currently an opencut mine, the operation has begun underground pre-development with full longwall production planned for 2007. The longwall mine will have an annual capacity of 3.7-4.1 million saleable tonnes semi-soft coking coal product for export.

Felix said the portal site would be excavated during the third quarter of the 2005 calendar year, with the feasibility study completed and longwall equipment ordered in the fourth quarter. The 2006 first quarter will see portal development commenced, and longwall ramp-up will start during the first half of the 2007 calendar year.

“This is a significant step forward for Felix in achieving the full potential of Ashton and expanding its coking coal production. Moreover, it introduces a strategic partner with access to sale and distribution channels throughout Asia and China, in particular, and the potential to expand into new markets,” Felix managing director Jon Parker said.