Orion Mining is preparing to restart operations at the Blair Athol coal mine in Queensland next month after it satisfied several conditions required by the state government for production to begin.
Blair Athol, one of Queensland’s oldest coal mines, has been closed since 2012 after Rio Tinto put operations into care and maintenance.
Orion Mining, a subsidiary of ASX-listed TerraCom, last year secured a deal with the Blair Athol Coal Joint Venture to buy the Bowen Basin operation for a nominal fee of $1.
The Queensland Government last week confirmed it would transfer the Blair Athol mining lease to Orion, a decision which is expected to create hundreds of jobs in the region.
Orion chairman Jim Soorley, who is also on the TerraCom board, said reopening the mine would lead to up to $85 million in taxes and royalties for the state under current prices.
“We plan to recommence mining in June with more than 600 direct and indirect jobs expected to be generated in the local and regional communities,” Soorley said.
Soorley said TerraCom had received strong interest from customers in North Asia for coal from Blair Athol.
“Over the next seven years we plan to export $1.2 billion in product – assuming current prices – delivering enormous value for TerraCom shareholders,” Soorley explained.
Orion’s $1 acquisition includes the mining lease, related licenses, land, site infrastructure, active contracts and all mining plant and equipment.
The Queensland Government will receive $79.6 million from the Blair Athol Coal JV for rehabilitation of the mine as part of the agreement.
TerraCom is planning more than 50 hectares of site rehabilitation while bringing the mine back into production. It expects to produce about two million of coking coal per annum of seven years, with ongoing rehabilitation.