Aquila to drop Federal Court case against Vale

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Aquila Resources says it’s resolved a legal argument between it and Vale over their joint owned Isaac Plains Coal Mine in Queensland.

The agreement allows both companies to sell coal from the mine until 30 June 2013, replacing a former agreement that was set to end this week.

The agreement is of particular importance to Aquila, which needs to raise revenue to develop its iron ore developments in Western Australia.

According to Reuters Brazil-based Vale last year tried to stop Aquila’s subsidiary IP Coal from selling ore from Isaac Plains and threatened to end their joint venture.

In a statement Aquila said the argument stemmed from a disagreement over whether each company could separately export ore from the mine.

"The issues between the parties arose from a difference of view where IP Coal maintains that each of it and Vale have clear rights to separately take their share of Isaac Plains coal and deliver it to their respective customers," it said.

Vale disagrees with Aquila’s understanding and says a separate permit is needed if a company wants to sell individually.

The short term agreement has allowed both companies to sell individually, and moved Aquila to drop a damages claim against Vale in the Federal Court.

A long term solution is yet to be agreed on.

Reuters reports Vale and Aquila have been locked in several court fights over their joint ventures, including two projects in QLD.

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