Aston blames the delays on the scrapping of the Part 3A approvals process in NSW and has now revised the start date of the $463 million construction of the project from 2011 to the first quarter of 2012 and increased the cost estimate of a rail spur and associated infrastructure.
Aston chief executive officer Todd Hannigan said: “Given the recent election, ongoing uncertainty regarding the transitional arrangements, the resourcing of the Planning Assessment Commissions and the fact that legislative amendments have not yet been introduced, we consider it likely that there will be a delay in the receipt of our environmental approval.
“Importantly, it is now essential that the NSW government appropriately resource the Department of Planning and Infrastructure and the proposed Planning Assessment Commissions to ensure that the backlog of applications before them is addressed without additional delays.
“Statutory timeframes should be implemented to ensure that the transitional
planning process does not expand unnecessarily.”
Speaking at the Sydney Mining Club in March, Hannigan said every effort was being made to keep discipline on costs for the project but it was inevitable that there would be some variation to figures quoted in the company’s prospectus when it floated last year.
"Particularly when you've got a very tight market, there are risks there," he said.
"I don't expect us to blow it out like other companies, where costs are double what they thought they were."
Tinkler owns more than a third of Aston, which was floated in August 2010 and now has a market capitalisation of $1.97 billion. Its main asset is Maules Creek, which Aston bought off Rio Tinto subsidiary Coal & Allied for $480 million in November 2009.
Aston also said yesterday design for key components of onsite infrastructure and the rail spur was reaching an advanced stage but with the benefit of detailed design information, the company was expected to complete a construction cost estimate by the end of the second quarter.
“As a consequence of a variety of factors, including the above change to the schedule and the increase in available design and geotechnical information, Aston expects there will be an increase to its capital expenditure estimate,” the company said.
“Aston is not yet in a position to quantify the likely size of this increase and will update the market when the review is further progressed, together with an update on the development schedule and production profile.”
Infrastructure solutions company Sedgman scored the procurement contract, worth $30 million, for Maules Creek in May for the procurement of long-lead items for the project.
This announcement followed Sedgman’s news last month of being awarded the $18.5 million design contract for a coal handling preparation plant at Maules Creek.
Maules Creek mine will produce a mix of thermal, semi-soft coking and pulverised coal injection coal, with projected sales expected to reach 10 million tonnes per annum by 2014.
Aston also expects to be able to present the final results of its drilling program and coal quality review by the end of the second quarter.
Preliminary coking tests have yielded positive results and suggest that there is upside in the percentage of metallurgical coal to be produced from the project.
This will need to be confirmed by further detailed coke tests that are underway.
“Upon receipt of this data, Aston will be able to confirm a revised product mix for the project to deliver maximum return for shareholders,” Aston said.
