MetRes, a joint venture (JV) between Stanmore Coal and M Resources, has acquired the Millennium and Mavis Downs coal mine in Queensland from Peabody Energy.
The mine is currently in care and maintenance with mining to recommence from July 2021, ramping up to a production rate of one million tonnes per annum. MetRes expects the mine restart to create between 150 and 200 long-term jobs.
An upfront cash consideration of $1.25 million and a royalty agreement will be provided for the acquisition, Stanmore stated.
According to MetRes chairman Matt Latimore, the company hopes to achieve low-cost mining through an underground expansion at the site.
“The acquisition opens the way to extracting full value from the Millennium and Mavis Downs mines by streamlining operations through auger and open cut mining methods followed by underground extension from the existing highwalls to achieve very low-cost mining, and stable production of low-ash, high-quality Mavis Downs metallurgical coal, a well established brand in the global marketplace,” he said.
M Resources subsidiary M Mining will recommence rehabilitation works at the site when mining restarts.
Rehabilitation obligations are expected to be around $25.7 million with Peabody agreeing to pay back $12.5 million of rehabilitation costs over two years.
“The acquisition and restart of Millennium and Mavis Downs Mine is a shot in the arm for Queensland’s economic recovery and for Central Queensland and we are excited to work with our partners, regional stakeholders, local and state government and long term customers in bringing this coal back to the market” Latimore said.
“This project will produce high quality metallurgical coal which is in high global demand and remains an essential component of the steel making process. Queensland is a reliable and high-quality supplier.”
Access to a 500,000-tonne-per-annum long-term rail and port capacity will also be provided under the acquisition.
Millennium and Mavis Downs has produced hard coking coals and metallurgical coals. The site contains a joint ore reserves committee (JORC) resource of 37 million tonnes.