Dispute leaves Eagle Downs grounded

Aquila Resources and Bowen Central Coal are disputing the infrastructure arrangements for their Eagle Downs hard coking coal project in Queensland.

The $2.3 billion Eagle Downs hard coking coal project in Queensland has hit a hurdle, with joint-owners Aquila Resources and Bowen Central Coal (BCC) disputing the infrastructure arrangements.

The project is owned in a 50-50 joint venture between Aquila Coal and BCC, a wholly-owned subsidiary of Brazilian mining giant Vale.

As part of the joint venture agreement, both companies must commit to a set of infrastructure arrangements by this Friday.

These arrangements include an allocation of storage capacity at the expanded Abbot Point coal terminal ready for export in 2012-13, as well as access to Queensland Rail’s upgraded rail network.

While Aquila supports the arrangements, BCC has indicated otherwise.

Vale’s preference is reportedly to export out of the Dalrymple terminal in Mackay, which would push the export date back to 2015.

“Aquila Coal considers this to be a default under the joint venture agreement and has today issued BCC with a default notice,” the company said. “BCC does not agree that it is in default.

“Aquila Coal will continue to seek to resolve the matter and will keep the market informed of any developments.”

Aquila executive chairman Tony Poli was unavailable for comment when contacted by MINING DAILY.

In a statement released last December, Aquila said the Eagle Downs project had been offered four million tonnes of the proposed expanded capacity at the Abbot Point terminal.

This announcement came after news the joint venture had been selected as a foundation customer by Queensland Rail for the Goonyella Abbot Point Expansion (GAPE) project.

The GAPE project will connect the Bowen Basin rail infrastructure through to the Abbot Point terminal.

The joint venture manager, Bowen Central Coal Management, has also signed a statement of commercial and risk sharing principles with Queensland Rail.

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