The decision by Vale not to take up its option within the required 60 days will end a troubled partnership with Aquila Resources on the project, which became marred with difficulty after the JV partners were caught up in a bitter dispute over product loading arrangements at the mine.
The dispute was patched up in March after the companies extended a “lifting agreement” from the mine which was originally due to expire.
In early April, Aquila Resources subsidiary IP Coal announced it would sell its half share in Isaac Plains to Ocean Coal Mining, a wholly owned subsidiary of Japanese giant Sumitomo Corporation.
“The conclusion of the pre-emptive period, and the satisfaction of the associated condition precedent to the sale to Sumitomo, is an important step towards completion of that sale,” Aquila executive chairman Tony Poli said in a statement.
“In light of the approval previously received from the Australian Foreign Investment Review Board the sale is now only subject to receipt of standard indicative approvals under the Queensland Mineral Resources Act, with settlement currently expected to occur in July.”
Aquila intends to sell its share in Isaac Plains so it can gain funds to construct its coal and iron ore assets.
Offloading its stake in Isaac Plains will also help the company secure two-thirds of the equity funding required for construction of the West Pilbara iron ore project in Western Australia once its 24.5% of the Belvedere coal project sale is concluded.
Isaac Plains has a production capacity of 2.8 million tonnes per annum and produces a mix of metallurgical and thermal coals.
