Australia-listed Stanmore Coal has appointed mining contractor Golding to restart production at its Isaac Plains mine in the first half of 2016, the miner said in a statement to the Australian Securities Exchange Thursday.
Stanmore acquired the Isaac Plains metallurgical and thermal coal mine in central Queensland from Brazilian miner Vale and Japanese trader Sumitomo Corporation earlier this year for a nominal sum of A$1 (72 cents).
The mine came with significant equipment worth A$350 million, including a coal washing plant, Stanmore said.
Isaac Plains expects to produce at least 1.1 million mt/year of coking coal over 2016-2018, and its operating costs are within the lower half of the global production cost curve, said the company.
"Challenging commodity markets have presented an exceptional opportunity for Stanmore, and in early 2016 we will become an independent producer of high quality coking coal for export to the steel industry in the region," Stanmore Coal managing director Nick Jorss said.
The Isaac Plains mine is located 170 km west of Queensland's Dalrymple Bay coal terminal on the Goonyella rail system and started production in 2006.
At peak output, the Isaac Plains mine produced 2.8 million mt/year of coal, catering it to major Asian steelmakers in Japan, South Korea and Taiwan, Platts has reported previously.
The mine was mothballed in September 2014 by Sumitomo and Vale, shipping its last cargo in February 2015, said Stanmore in a presentation.
Stanmore said its low-cost approach and optimized mine plan for Isaac Plains, including targeting a lower strip ratio for coal in the mine's northern pits, are to result in a 35% reduction in its FOB unit costs.
First shipment from the Isaac Plains mine under Stanmore's control is scheduled for April 2016, said the company. Total transport cost for the mine is A$15/mt, and Stanmore has secured 1.1 million mt/year of shipment capacity in Dalrymple Bay coal terminal on Queensland's central coast.
Re-opening the mine will lead to creation of 150 jobs, and the restart is fully funded with existing company cash reserves, and a A$42 million two-year loan from Taurus Mining Finance Fund, Stanmore said.
Golding has been appointed as contractor for a three-year period following a competitive tender process, and its activities will cover waste removal, coal mining and coal processing.
Queensland-based Goldings has mining contracts with several other mines in the region including, Wesfarmers' Curragh, CS Energy's Kogan Creek and also with BHP Billiton for its Gregory and Blackwater mines.
Stanmore is providing certain capital plant equipment such as a dragline and a coal washing plant to the contractor.
The company has combined the Isaac Plains mine with its Isaac Plains East coal deposit to create a low-cost, long-term coking coal mine that utilizes existing mine infrastructure, said Stanmore.
