Bandanna said only six objections were received over Springsure Creek and it had received “constructive responses’’ from three and was trying to resolve all six in coming weeks.
“Until this process of resolving objections reaches a conclusion, its impact on the timing of the grant of the mining leases for the Springsure Creek coal project remains uncertain,’’ the company said.The project has been dogged by controversy partly because it is situated in some of the best cropping land in the state and landholders have led a strong campaign against it.
But the landholders are not its only problem.Bandanna Energy has been allocated 4mtpa of capacity at WICET, near Gladstone, but will have no coal ready for shipment by the time WICET opens in November leaving it potentially exposed to take or pay liabilities.
“Bandanna has advised WICET and its advisers of the uncertainty around the timing of the grant of the mining leases for the Springsure Creek coal project and that Bandanna is seeking to amend commercial terms of its agreements with WICET to better match a delayed ramp up profile,’’ the company said.Bandanna has also admitted it is in talks with Credit Suisse over the impact of the delays on its senior secured guarantee facility.
Analysts have also raised concern about Bandanna’s inability to earn a mining licence raise funds for Springsure and regard it as “vulnerable’’ to potential delays.But Bandanna is not alone. A host of coal producers are stuck with a WICET problem and WICET’s future is also clouded.
The terminal, which was funded by eight coal mining companies, is due to start exporting coal in November but its ownership is up in the air and Grant Samuel has been brought in to look at the facility’s long term future.Analysts have already speculated that about half of the contracted tonnage for WICET has been cut from production because of poor prices, leaving those companies exposed to the liability of their take or pay contracts.
Cockatoo Coal has also been forced to roll the dice on a $380 million expansion bid at its Baralaba North coal mine in central Queensland.The company has one mining lease granted for the “continued operations project’’ project, but needs more and has produced an environmental impact statement on the plan.
But the gamble for the company is that it has take or pay contracts for exporting the coal through WICET and its current production is well short of the tonnage needed to fill the liability.However, the company has confidence the EIS will be ticked off.
In its EIS, Cockatoo said its already approved Baralaba North/Wonbindi North Mine would continue beyond 2015, the mining rate was “not sufficient to meet the take or pay commitments made by CCL at the Wiggins Island Coal Export Terminal without development of the Baralaba North continued operation project’’.The existing Baralaba mine is approved at 1 million tonnes a year, but the expansion will lift that to 3.5mtpa.
“The timing of full production of 3.5mtpa is expected to be in line with our WICET and RG Tanna Coal terminal contracted capacities being made available,’’ the company said.
