Under the deal, Bhushan Steel will have the first right to develop Bowen Energy’s existing and future coal projects and will be required to fund all development costs, and the required design, construction and commissioning.
Before listing on the Australian stock exchange in February, Bowen Energy told potential shareholders it planned to take advantage of the rapid economic growth in China and India and the subsequent demand for Australian commodities.
“The combination of booming demand and inadequate supply has resulted in near-record prices being paid for Queensland coal – with recent contracts for coking coal reaching $US115 a tonne,” the company said.
“Bowen Energy, as a small and tightly run coal and mineral explorer, aims to place itself to take advantage of this unprecedented growth,” the company said.
The memorandum of understanding is expected to help fund the development of Bowen Energy’s coal projects into commercial operating coal mines, which would potentially supply Bhushan Steel’s expanding operations across Asia.
Bowen Energy’s projects include four coal exploration licences in the Bowen Basin.
Funds raised by the successful completion of the MoU will also allow the company to pursue its uranium deposit projects in Queensland and Western Australia and fund future potential acquisitions.
