Australia's APC wins Dartbrook thermal coal mine appeal

Source : https://www.argusmedia.com/en/news/2155660-australias-apc-wins-dartbrook-thermal-coal-mine-appeal

 

Australian mining firm Australia Pacific Coal (APC) has won its appeal to extend the lifespan of the 5mn t/yr Dartbrook thermal coal mine in the Hunter valley region of New South Wales (NSW) until 2027, paving the way for its restart next year should prices make it economic.

The NSW Independent Planning Commission has agreed in the Land and Environment Court to allow APC to continue mining until December 2027 rather than December 2022, subject to conditions relating to site rehabilitation and noise. The five-year extension could allow APC to restart the mine next year, depending on APC's ability to raise finance for the project.

The mine was put on care and maintenance by previous owner UK-South African mining firm Anglo American in 2006, when the high-grade thermal coal price was as low as $50/t fob Newcastle for 6,000 kcal/kg NAR. Argus last assessed this price at $55.87/t on 30 October, although it had been around $50/t since late April when Covid-19 shutdowns reduced demand in several key consuming nations.

Most Australian coal mining firms have deferred investments this year, prompting some analysts to suggest that there will be a supply shortage if demand strengthens this northern hemisphere winter. Switzerland-based bank UBS expects thermal coal prices to average $65/t fob Newcastle in 2021, up from an average of $59/t in 2020. This will lift many Australian coal mining operations from loss making to becoming profitable, although it may not be strong enough price to see the restart of mines like Dartbrook.

Dartbrook produced coal with 9-10pc ash content, 0.3pc sulphur and a calorific value of 6,200-6,300 kcal/kg before it was closed. APC had hoped to restart the mine in 2019 before the NSW state government rejected its plans to extend the mine life to 2027.

The firm agreed to buy Anglo American's 83.33pc stake in Dartbrook in December 2015 for A$50mn ($35mn) but struggled to complete the deal until May 2017. Anglo American agreed to lend APC A$7.7mn through a secured vendor loan as part of the settlement.

By Jo Clarke

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