The coking coal mine in Queensland’s Bowen Basin has been under care and maintenance since late 2014.

Stanmore wants to restart mining by the first half of next year at an initial production rate of 1.1 million tonne per annum, compared to 2.8Mtpa under prior ownership.

At current coking coal prices, the company estimates a further open cut mine life of three years is possible.

For the acquisition price of $1, Stanmore will take over management company Isaac Plains Coal Management and assume all outstanding contracts including for rail haulage and port access, accommodation and transportation services, and utilities.

It will also inherit key assets to help bring the mine back into operation.

These include a Bucyrus 1370W dragline; a coal handling, preparation and processing facility with a nameplate feed rate of 500 tonne per hour; train and rail facilities that connect to the Goonyella rail system; and spares and workshop goods.

In exchange for releasing Vale and Sumitomo from ongoing material liabilities, Stanmore will receive a series of compensation payments within the first 12 months of completion. These will be repaid to the vendors via a production-based royalty to be applied based on coal price thresholds.

Stanmore expects the transaction will be completed by the end of October, subject to main conditions being met, including getting approvals from the Foreign Investment Review Board and government, as well as finalising the novation or assignment of material contracts.

A tender process for the selection of contractors for mining and coal handling processing plant activities is underway.

Upon completion of the transaction, Stanmore will own 100% of Isaac Plains, which contains an updated JORC Resource of 30.1Mt with open cut JORC Reserves of 5Mt.

“The acquisition provides Stanmore with an established coking coal mining operation with the potential to continue building a strategic platform in the region,” the company said.

Significant capital and operational synergies are anticipated with the recently acquired Wotonga deposit, located immediately to the east of Isaac Plains. An exploration plan at Wotonga will be undertaken before the end of the calendar year.