Stanmore Coal has bought Isaac Plains coal mine for $1.
The mine was owned by Vale and Sumitomo which put the operation into care and maintenance in September 2014 due to low coal prices.
Stanmore said the acquisition includes all assets held by the joint venture including the dragline, CHP, rail loop, loading facility and mine infrastructure area.
The company will also be compensated by Vale and Sumitomo for some of the contractual commitments it will become responsible for.
These payments are expected to cover fixed infrastructure charges and the working capital requirements of Stanmore through to first coal and the ramp up of operations.
As part of the sale, Stanmore will take on the $32 million rehabilitation obligation associated with the mine.
Stanmore plans to start mining at Isaac Plains early next year at a reduced rate of 1.1 million tonnes per anum. This will give the mine a three-year life-span.
Nick Jorss, managing director of Stanmore, said the acquisition of Isaac Plains represents a transformational step for the company.
“It’s an exciting time for the Stanmore team as we prepare to join the ranks of Australia’s coking coal producers in supplying high quality coal to the large steel mills of Asia,” Jorss said.