Eagle Downs is owned by the Bowen Central Coal Joint Venture – a 50:50 joint venture between Aquila Coal and Vale subsidiary Bowen Central Coal.

Yesterday Aquila Coal issued Bowen Central Coal with a default notice under its joint venture agreement over infrastructure requirements for Eagle Downs.

Aquila wants to export out of Abbot Point and commit to partially funding the Goonyella Abbot Point expansion project to link Eagle Downs to the port. However, joint venture partner Vale has proposed alternative plans.

“The main issue in question is the development of Abbot Point with the certainty of first production in 2013 compared to the Dalrymple Bay option with first production in 2015,” an Aquila spokesperson told International Longwall News.

A Vale spokesperson confirmed Vale and the joint venture partners held different views over the logistics for Eagle Downs.

He said Vale had worked hard to help Aquila understand Vale’s view and to propose solutions for working together successfully.

“Vale does not agree that we are in default. We and Aquila have different views about the best logistics solution for the JV,” the spokesperson said.

“Always acting in the best interest of the JV, Vale tried to demonstrate to Aquila our views and conclusions but unfortunately Aquila refused to accept our point of view.

“Since this is a 50:50 JV, this issue has to be solved considering the provisions of our joint venture agreement.”

Eagle Downs has already been offered 4 million tonnes per annum of the proposed expanded capacity at the Abbot Point Coal Terminal, subject to completion of take-or-pay contracts in the 2010 first quarter.

Before this, Aquila had been selected by Queensland Rail as a foundation customer for the Goonyella Abbot Point expansion project, which involves a missing link railway line that will connect Bowen Basin rail with Abbot Point.

Bowen Central Coal Management had signed a statement of commercial and risk-sharing principles with QR over the project.

To commit to the infrastructure, the joint venture, with consent by parent companies Aquila Resources and Rio Doce Australia, is required to execute an agreement by this Friday.

Eagle Downs will be developed as an underground mine targeting 4.6Mtpa of hard coking coal from a single longwall and up to 8Mtpa once a second longwall is installed.