Miner ready to go
Wednesday 25 November 2015
STANMORE Coal says it’s on track to start exporting coal from its recently purchased Isaac Plains coal mine early next year.
Managing Director Nick Jorss told Shift Miner they have started preparing the site for a return to production and expects to award key contracts before Christmas.
“We have G&S Engineering helping replace the swing rack and doing a bunch of other maintenance on the dragline, so we are spending a bit on it,” he said.
“It was swinging in December last year so it is in pretty good condition, but it is a critical piece of gear so we want to get it up to a high standard.
“We are also in the short strokes of awarding mining contracts in the next few weeks, and based on how that goes we are hopeful that we can get plant mobilised not long after.
“As you know it’s a pretty competitive market out there so people have been pretty realistic with their prices.
“We are excited about the mine and looking forward to getting going even though it’s a tough market, but we did our homework and we feel confident.”
Stanmore Coal will contract out all mining operations at Isaac Plains and expects around 150 jobs will be created when the mine becomes operational.
Mr Jorss remains bullish about the longer term prospects for metallurgical coal, saying it is only a matter of time until the fundamentals reestablish themselves. However he acknowledges that there will be more challenging times in the near future.
In 2011, Japan based Sumitomo Corporation paid $430 million for a half share in the Isaac Plains mine. In July this year, Stanmore Coal purchased the mine which is in care and maintenance for just $1 dollar and Sumitomo also loaned Stanmore money to cover contractual obligations, which will have to be repaid when the mine is operating.
However one man's trash is another man's treasure, and almost every private fortune made in mining, had its genesis in a period like this when entrepreneurial miners could see value where other corporate miners couldn’t.
The purchase is likely to make or break Stanmore Coal, who with just $17 million in cash, is punting everything on the belief that they can restart the mine profitably, either by lowering costs or through improved coal prices.
The mine deposit has about 10 million tonnes of measured coking and thermal coal, with Stanmore aiming to export around 1 million tonnes of coal a year.
It is also adjacent to the Wotonga coal deposit which Stanmore bought from US coal giant Peabody for around $7 million in July.
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