The company also announced it had secured a memorandum of understanding with Sumitomo for the formation of a JV covering Aquila’s Queensland coal exploration assets and it would continue with the sale process of its Washpool hard coking coal project in Queensland.

In a statement today, Aquila executive chairman Tony Poli said the sale was a big step in gaining funds for the construction of its coal and iron ore assets and would help the company secure two-thirds of the equity funding required for construction of the West Pilbara iron ore project in Western Australia once its 24.5% of the Belvedere coal project sale was concluded.

Aquila will also retain its 50% economic interest in an insurance claim in relation to property damage and business interruption during the wet season in the 2011 financial year.

The sale is subject to Sumitomo receiving approval from the Australian Foreign Investment Review Board and relevant indicative approvals under the Queensland Mineral Resources Act.

Aquila holds 50% of Isaac Plains, which is an operating open cut coal mine located east of Moranbah, with Brazilian group Vale.

The mine has a production capacity of 2.8 million tonnes per annum and produces a mix of metallurgical and thermal coals.

Aquila’s share of the product is exported through the Dalrymple Bay coal terminal.

The exploration MoU provides for the acquisition by Sumitomo of between a 20% and 50% interest in the tenements of its choice based on a valuation determined by an independent expert to be agreed by the parties.

The proposed JV would be managed by Aquila to identify and develop commercially mineable coal resources, the company said.

Sumitomo already holds existing direct investments in JVs that own and operate thermal and metallurgical coal mines in the Bowen Basin area of Queensland.

“Aquila is pleased to enter this MoU with a highly regarded and well-aligned partner focused on the development of coal projects in Queensland,” Poli said in the statement.

“Combining Sumitomo’s financial strength and experience in producing coal joint ventures with Aquila’s high quality exploration portfolio and strong management team will allow the company to maximise the potential of its exploration portfolio.”

In light of the current depressed state of the manganese market, Aquila said it had decided to terminate the sale process for its Avontuur manganese project area.