Coal International increased its ownership of King Coal from 17% to 29% for around £2.66 million ($A6.17 million) in cash. King-Coal owns two surface and two underground operations capable of producing more than 2 million tons per annum of clean coal over a mine life in excess of ten years. Total reserves are about 35Mt.
The company also owns a 6Mtpa coal preparation plant, currently under refurbishment. The upgrade will be completed within two months.
Coal International will begin production in two months at King Coal’s properties at a rate of approximately 80,000 tons per month of coking coal before ramping up to full production within three years. Capital cost required to achieve full production will be funded from current cash reserves.
The company also took a 58% stake in new company Maple Coal for around £2.59 million in cash. Subject to transfer of existing permits, Maple Coal will own 87Mt of low-sulphur, high-quality thermal and mid-volatile coking-coals (approximately 48 million clean tons).
Maple Coal will commence production at 1Mtpa over an estimated mine life of 17 years. Capital required to establish the surface mining operation, utilising contract miners, is anticipated to be less than $US9 million, intended to be funded from cash reserves.
Following receipt in approximately two years of new mining permits for underground operations, production will begin at 1Mtpa with an estimated mine life of 8.5 years.
Collectively, the operations have the potential to produce up to 2Mtpa within the first full year of production, growing to an annual production rate of more than 5Mtpa by year four and totalling 43Mt over the next ten years.
Both investments are in-line with the Coal International’s plan to acquire international projects at or close to production.
Coal International has also appointed former Newmont Mining Corporation executive W Durand Eppler as its chief. Dan Stickel has been placed in charge of the company’s US operations. Previously, Stickel has worked for Drummond Company, US Steel Mining and Arch Coal.
