South32 will look to progress the Eagle Downs coking coal project in Queensland’s Bowen Basin to production, after it assumes control of the project along with a 50% ownership stake in a $177 million deal announced on Tuesday.
The ASX-listed miner announced it had acquired 50% of Eagle Downs from Chinese firm BaoWu on May 29, saying it valued the project’s high quality coking coal.
“We have a long-standing relationship with BaoWu as a supplier of manganese ore and alloy,” Souith32 chief executive Graham Kerr said.
“We are very pleased to be able to further strengthen this relationship by assuming operatorship of Eagle Downs. This acquisition embeds an attractive development option within our growing operating footprint and puts our strong balance sheet to work in a disciplined manner.
“This high quality metallurgical coal project benefits from prior investment which has the potential to support its accelerated development and deliver significant value to both South32 and [BaoWu subsidiary] Aquila.”
Eagle Downs has a reported coal resources of 1,122 million tonnes, of which 67% is measured, 12% is indicated and 21% is inferred.
Aquila believes Eagle Downs can export 4.5 million tonnes per annum of coal from one longwall, over the first 10 years of production.