Moorlands given $15m boost from major Chinese company
THE Cuesta Coal development open-cut project at Moorlands, near Clermont, has strengthened following an injection of $15 million from its major Chinese backer the Beijing Guoli Energy Investment Company.
Longluck Investment (a subsidiary of Beijing Guoli) agreed to place more than 80 million new shares.
This increases its stake to 54% and may provide the market boost the region's economy needs as Cuesta Coal furthers its plan to develop Moorlands into an operational mine by 2016.
Cuesta Coal managing director Matthew Crawford confirmed yesterday that the investment would help advance its "definitive feasibility study" on the mine and its projected 30-year life.
"We have done three years work on drilling, scoping and studies," he said. "We hold total reserves of 270 million tonnes and propose 1.7 million tonnes of production coal a year over its life."
Given the industry downtown, Mr Crawford was pleased by the confidence shown and said the Chinese company (once the share placements were completed) would have invested $47 million.
This would also improve its opportunity to secure construction project finance for Moorlands of $150 million.
"We will talk to various banks in Australia and China to facilitate the loan," he said.
Asked if Link Energy might still be interested in the company because of its coalmine operation at nearby Blair Athol, Mr Crawford said Cuesta would happily look at any merger or acquisition opportunities that would assist Moorlands into production.
"Or if there was another project out there that suited our strategies. There is nothing on the horizon at the moment," he said.
It was still too early to say how many would be employed on construction and during operation, he said.
WEAK coal prices are bleeding multinational miners dry and drawing smaller and more nimble firms out of the shadows ready to prey on an operation going cheap.
Industry conditions are ripe for sales, with the Queensland Resources Council last week telling the Queensland Government it expected one in four coal mines in the state were now failing to turn a profit.
Just days earlier, former billionaire miner Nathan Tinkler snapped up the mothballed Wilkie Creek mine near Dalby in a deal worth up to $150 million.
The south-west Queensland Peabody mine was shut down late in 2013, putting up to 200 out of work.
Speaking in Mackay recently, QRC chief Michael Roche discussed just how little companies were earning when their coal was dispatched from port.
Coking coal - used to create iron ore - is currently selling for US$115 a tonne.
After port, rail and royalty costs, just $8 of that returns to the company coffers. Energy coal now sells for US$73 a tonne, up to $4 below what it takes for a miner to shift it from the ground to the customer.