Felix’s share of saleable production from its three mines reached 1.3 million tonnes, with its wholly owned Yarrabee open cut mine in Queensland’s Bowen Basin producing 376,000 tonnes, a 2% gain from last year’s September quarter.

Having purchased 2100 hectares of additional land at the site, Felix is planning to ramp up the mine from the current target of 1.8Mt per annum to 2.8Mtpa.

Felix’s 51%-owned Minerva open cut mine in the state lifted production 4% year-on-year to 690,000t, while its 60%-owned Ashton open cut and underground operation in New South Wales increased total output by 35% to 951,000t.

For Ashton underground, Felix said the longwall change from panel 4 to panel 5 in the current quarter would have all sales coming from open cut mining for the last three months of 2009.

The mine also has two new semi-soft coking coal contracts with two Chinese steel mills, in addition to its contracts with traditional customers in Japan, Korea and Taiwan.

Commenting on Minerva, Felix said the mine’s sales were limited by rail availability, but new longer trains in the December quarter should have rail capacity meeting the mine’s target output of 2.7-2.8Mtpa.

Moolarben

Located in the Upper Hunter Valley, Felix said the 1800 tonnes-per-hour coal handling and preparation plant for Moolarben was on track for completion in March.

“There are around 250 construction personnel onsite and a large number of offsite contractors carrying out steel fabrication and equipment supply mainly in New South Wales and Victoria,” Felix said.

“Rail loop civil works and the turnout off the main line is complete. Track laying will be complete by the end of December 2009. Water pipeline and electricity supply works are well advanced and due for completion by January 2010.”

Felix has assembled and commissioned some of its mining equipment and said open cut overburden removal would start in the first week of November using one of the two 24-cubic-metre excavators along with a fleet of 240t trucks.

“The first contingent of mining personnel have been recruited and are undergoing site induction and training prior to start-up in early November 2009,” the company said.

“It is planned to start mining coal in the first quarter of calendar year 2010 in readiness for the commissioning of the coal preparation plant and train loadout.”

Felix expects state government approval of its stage 2 development plans for Moolarben “in the near future”.

The company is seeking to add an extra longwall and open cut to the operation.

Felix aims to have each of the two longwall mines producing up to 4Mtpa, mainly within the D section of the Ulan seam.

This mining will extract thicknesses of up to 4m in panel widths of up to 300m, with the longwalls operating at 2500 tonnes per hour. Underground resources are estimated to be 54Mt.

With the first shipments from Moolarben expected to coincide with the completion of Newcastle Coal Infrastructure Group’s $1.3 billion export terminal in March, Felix said the new terminal was more than 80% complete.

A member of the NCIG consortium, Felix said commissioning of the first stacker and reclaimer was underway while the second was due to be completed in December along with the dry commissioning of the 10,000tph shiploader.

Moolarben is expected to produce 6Mt of thermal coal for 2010, with 4.5Mt destined for export and 1.5Mt for the domestic market.

Full ramp-up will have Moolarben exporting up to 13Mt of product coal for export and domestic markets, with 8.8Mtpa from open cut mining and 4-4.2Mtpa from longwall mining.

But under stage 2 plans, Felix is seeking approval for up to 17Mtpa run-of-mine production, with 8Mtpa from longwall mining and the rest from four open cuts.

Financing

Felix also announced today it has concluded $383 million of syndicated financing with a banking consortium of Commonwealth Bank, Sumitomo Mitsui Banking Corporation, BNP Paribas, WestLB AG and Westpac.

To fund Moolarben development there is $150 million in term debt financing under a five-year period and $133.33 million for the same amount of time to finance mobile equipment leases.

Contingent liabilities and working capital needs each have $50 million set up under a two-year revolving financing facility.

The funding arrangement also helps prepare Felix for the likely takeover of the company by China’s Yanzhou Coal Mining.

“With these new facilities and cash on hand, Felix is well placed to fund the development and start-up of the Moolarben coal project,” Felix said.

“As a part of arranging these new facilities, the condition in the scheme implementation agreement with Yanzhou which required that all the necessary contents, waivers and releases be given by Felix’s financiers to the proposed Yanzhou acquisition of Felix has now been satisfied.”

The Australian government has already approved Yanzhou’s $18 a share offer, which includes special dividends.

Felix shareholders will vote on the proposal on December 8.

Yanzhou must gain two-thirds of its shareholders’ approval at a meeting on October 30, as well as Chinese regulatory consents.

Shares in Felix are unchanged at $17.40.