2011 proved to be a bumpy year for Aquila, following disputes with its joint venture partner Vale surrounding coal marketing arrangements from the Isaac Plains mine, while also being locked in legal battles over infrastructure arrangements for the Eagle Downs hard coking coal project.

But the strained relationship between the JV partners could be mended following a recent management shake-up at Vale, which included the appointment of BHP Billiton Mitsubishi Alliance veteran Jason Economidis and Mauro Neves as global directors for the company.

Steve Badenhorst also replaced Vale’s Decio Amaral in August, who left as global coal director following two rocky years at the company.

The new appointments opened a door of opportunity for renewed discussions between the companies, Poli told ILN.

“We haven’t met the two more recent appointments yet but we certainly welcome these people to the joint ventures that we have with them and we’re hopeful that we can have a better working relationship and move forward,” he said.

The road to restoring the partners’ embattled relationship has already begun following a short-term agreement struck back in July, enabling the coal shipments from the companies’ Isaac Plains JV to be restored.

The dispute was triggered early in the year when Vale ended an arrangement for joint marketing of the mine’s coal with Aquila subsidiary IP Coal.

It caused shipments to be cancelled and stockpiles at the mine to reach capacity.

Poli said to date the short-term agreement for Isaac Plains had been effective.

“We do have an agreement in place which is working and we’ve had good sales, as have Vale,” he said.

Poli is also hopeful the JV dispute with Vale over the Eagle Downs hard coking coal project in Queensland will be put to an end.

Months of court actions over Vale’s decision to pull out of arrangements to secure 4 million tonnes per annum of port and associated rail capacity at Abbot Point prompted Aquila to start legal proceedings over the decision, which Vale is now appealing.

Poli is confident after five years in development, Eagle Downs will begin construction next year, subject to gaining necessary infrastructure agreements.

“We now need to identify and secure rail and port contracts and as soon as we have those in place, we can prudently consider development of the mine,” Poli said.

“The project is in a very strong position given the level of studies and given the fact more recently the mining lease has already been granted.

“We’re hopeful that Vale will this time secure the necessary rail and port for the project to see it developed.”

Poli revealed the company’s plans to sell its Washpool coal project were on track following the selection of a short list of bidders for the project.

He said a sale could be finalised by the end of the year.

Aquila will use the money raised from Washpool to fund the equity component of its West Pilbara iron ore JV project with AMCI, which will also begin construction next year.

In Aquila’s recent quarterly report, Isaac Plains recorded a 71% increase in saleable coal production compared to the June quarter and Poli said coal sales from the mine would further be boosted in the next quarter.

While the short-term coal agreement for the mine is marked to end on March 31, 2012, Poli said he was hopeful a long-term agreement could be made or an alternative option would be found.

“If we can’t agree on a long-term lifting agreement, I don’t see a real issue, certainly from Aquila’s side, as to why we can’t maintain the short-term lifting agreement, either as an interim measure or a long-term measure,” Poli said.