AusPac and SNR to form JV at Dartbrook coal mine relaunch for $20m

Australian Pacific Coal has entered into a non-binding agreement with M Resources with respect to a proposed 50:50 joint venture.

Australian Pacific Coal and Stella Natural Resources (SNR) will become equal joint venture (JV) partners on the Dartbrook coal project in the Hunter Valley in New South Wales.

Canada-based SNR, known primarily for its US operations, will act as manager of the JV through its Australian subsidiary, who will oversee the project’s development, life-of-mine (LOM) funding, marketing and operations.

SNR will pay Australian Pacific $20 million for a 50 per cent stake in the Dartbrook mine, which the two companies plan to restart.

Australian Pacific plans to spend $10 million of this for repayments on an existing secured loan with Anglo American. Australian Pacific purchased the Dartbrook mine in May 2017 from Anglo American (which held an 83.33 per cent interest) and Marubeni Coal (16.67 per cent interest).

For Anglo American’s majority share, Australian Pacific agreed to pay $25 million in cash plus royalties, equal to $3 per tonne and 25 cents per tonne for coal sourced from other sites and processed at Dartbrook.

The 6Mt/y mine has been on care and maintenance since 2006 and already has a useable coal handling  preparation plant (CHPP) in place. Australian Pacific sought approval earlier this year for bord-and-pillar mining as an alternative to the site’s already-established longwall mining.

SNR and Australian Pacific hope to recommence operations sometime in 2019. Completion of the Dartbrook JV is expected in the March 2019 quarter.

“Dartbrook provides the infrastructure and resource to deliver a sustained, reliable high-quality, low-emission product to our potential customers,” said SNR chief executive officer David Stone.

“We see this as a tremendous opportunity for the local community and look forward to working with stakeholders as the operation progresses.

“For SNR, Dartbrook is the entry operation into the Australian coal sector after the successful integration of our US assets and we look forward to expanding our footprint as we successfully implement.”

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