Future for Central QLD mine now set for next few decades
THE long term future of CQ's Kestrel coal mine and its workforce of up to 800 is now assured thanks to its recent purchase by a joint venture.
Located in the Bowen Basin at Crinum, 51 km northeast of Emerald in Central Queensland, Australia, the underground coal mine produces 5.5 million tonnes of steel making metallurgical (coking) coal annually.
Kestrel Coal Resources CEO Peter Smith said he was very proud of the purchase and was very excited for what the future would bring.
He spoke with The Morning Bulletin to explain some of the background behind the purchase and what it would mean for the long term future for the region.
"The previous owner Rio [Tinto] put the assets up for sale in 2017 and we were fortunate enough back in late March to be successful in our bid to buy Ketrel [for $3.03 billion]," Mr Smith said.
"In the last four months we've worked to build up the company and go through the transition process and today consumate that deal."
He said Kestrel Coal Resources, which made the purchase, was joint venture between a private equity group, Melbourne-based EMR Capital, who had a 52 per cent stake and Indonesian energy company, PT Adaro Energy- 48 per cent.
Mr Smith said they came up with the money for the sale through "part equity and part debt", saying the lending market still looked favourably upon lending money towards the metallurgical coal projects, which was fetching a healthy price and had a strong demand.
"All of our coal is marketed predominantly into the Asian steel sector with a little bit going into Europe, I don't think that's going to change in the future," he said.
"Predominantly going into India where there's a lot of domestic growth, China, Taiwan, South Korea and Japan.
"We started this process with a lot term view of the ownership of the asset, we're happy if the prices are high, they're stable at the moment but you have to set yourself up to work through the down turns as well if you're a long term owner."
He said the mine was reserved for the next 25 years and they had resources to last them up to 40 years.
The mine has 400 full time employees and a similar number of contract workers with a total of 700-800 working on any one day.
For them, Mr Smith said the change in mine ownership has been a smooth transition.
"Everyone who was on site yesterday is on-site today, so it was completely seemless," he said.
"The only change is that there is a new owner and [staff] will ultimately wear a different coloured shirt."
The CEO wishes to continue Kestrel Mine role of not only being a major source of local employment and economic growth, but also to continue to work in partnership with the local community to help provide positive and sustainable outcomes for the Emerald region.
They were also focused on working diligently to maintain their low impact and strong track record on environmental issues.