Whitehaven Coal (WHC) will start work next week on its $767 million Maules Creek mine in north west NSW after getting the final approval from the State government.
The company, which last month saw controversial shareholder Nathan Tinkler evicted from the share register by his creditors, says the mine will start producing late next year.
Whitehaven shares rose 4c to $2.28 yesterday, a rise of 1.8%.
WHC YTD – Whitehaven to build Maules Creek mine
The project is probably the only new coal mine that will be built in Australia in the next year.
Other mines, such as the $1.2 billion Aquila Resources (AQA) coking coal mine in central Queensland are being built – but will work will be done more slowly to save money and cut costs, meaning the project will take a year to 18 months longer than planned.
Whitehaven will build the Maules Creek project without delay. Around $160 million has been already spent on the mine’s development.
Of the remaining $607 million to be spent, Whitehaven will be up for $455 million.
The federal government gave conditional approval for the project in February this year.
‘‘It expects to employ 340 full time equivalent employees and contractors in the construction phase and approximately 470 during ongoing operations,’’ Whitehaven said.
The $767 million cost of the mine will be shared amongst Whitehaven and the other stakeholders in the project, Japan’s Itochu and J-Power.
“This is a significant and very welcome milestone for our business, our shareholders, our employees, and the north west New South Wales economy,” Whitehaven Coal Managing Director Mr Paul Flynn said in yesterday’s statement.
"The project is one of the most significant investments currently underway in regional NSW. It expects to employ 340 full time equivalent employees and contractors in the construction phase and approximately 470 during ongoing operations.
“The regional support for this project has been immense and very gratifying. We can now get on with the job of delivering to the community the benefits of this much-anticipated investment.
“Throughout the three-year approval phase our project development team has developed an extremely comprehensive project delivery strategy, which has been validated by all levels of government, and we will be commencing construction imminently now that contracts can be executed.
“The project has been through one of the most rigorous planning approvals processes ever undertaken by a mine in New South Wales and has been reviewed by a wide range of highly regarded environmental experts,” Mr Flynn said.
The Maules Creek Mine is approved to extract up to 13 million tonnes of coal a year and rail 12.4 million tonnes of coal from the site in any calendar year.
Whitehaven said its share of the capital costs will be funded by existing facilities and ongoing cash-flow.
Late last year the project was the subject of an alleged hoax media release claiming funding for the project from ANZ Bank had been withdrawn. That saw Whitehaven shares fall, then rise.
Corporate Regulator ASIC announced earlier this week that charges would be laid over the alleged hoax.
And iron ore exporter and steel maker, Arrium (ARI) will take another $480 million in charges from its restructuring efforts in its results for the 2012-13 financial year.
The charge follows an earlier write down of $474 million on its steel business, announced in February.
The latest set of charges follow the decision by Arrium to sell its steel merchandising business and US steel recycling operation.
That will cost $360 million alone.
The other $120 million will be taken from the reorganisation of Arrium’s recycling business in Australia and in other parts of the company.
"We have a priority to reduce the company’s overall level of debt," Mr Robert said in a statement.
"Today’s announcement reflects initiatives in our Steel and Recycling businesses, with our focus on improving earnings and cash generation."
The news was announced to the ASX last night, well after trading had finished.
Arrium shares ended at 80 cents yesterday, up 3c on the day. That’s below the 88c a share offered by Posco of South Korea last year.
Arrium’s shares have been rising slowly as the Australian dollar has fallen in recent weeks. That will boost returns from its iron ore export business and make steel imports more expensive.
ARI YTD – Arrium flags $480m writedown
