Aquila wanted to secure the project’s logistics before going ahead with development – especially since it needed bank financing for its half-stake in the project.

Last month, the company suffered a setback in its dispute with Vale over Eagle Downs, with the Queensland Supreme Court upholding a Vale appeal against an Aquila injunction.

In September, Aquila won an interlocutory injunction restraining Vale’s wholly owned subsidiary Bowen Central Coal (BCC) from voting on a resolution proposed by Vale in relation to Eagle Downs.

Aquila started legal proceedings last year after Vale unexpectedly pulled out of arrangements to secure 4 million tonnes per annum of port and associated rail capacity to export through Abbot Point in 2013.

“Although Aquila Coal’s preferred option was for project sanction to occur with the project having secured suitable port and rail logistics, Aquila Coal voted in favour of undertaking mine development in order to avoid any risk of a buy-out right arising in favour of BCC under the Bowen Central Coal joint venture agreement in relation to what Aquila Coal sees as a highly valuable asset in the strategically significant market for hard coking coal,” Aquila said in a statement.

The mine is expected to produce an average of 4.5Mt per annum over the initial 10 years of life once the longwall commences operation in the first of three target seams and will have an estimated mine life of approximately 48 years.

The JV has approved an early works budget for the project of $77.4 million for the 2011-2012 year.

Civil works to provide site access, provision of essential mine services including power and undertaking the gas drainage program are underway.

“It is expected that the commencement of the access to the underground drifts will be completed this financial year in preparation for the drift driveage in 2012-2013,” Aquila said.

“Work continues on seeking to identify and secure a suitable port and rail logistics solution for the project. The manager on behalf of the project [Aquila] has participated in the selection process for capacity at Wiggins Island Stage 2A. The project is waiting on the announcement of the outcome of this which is expected to be in Q1 2012 and would see capacity available in late 2015.

“In addition, the participants have individually applied for capacity at the proposed new coal terminal at Dudgeon Point which is expected to be available in 2017.”