Australian Dartbrook coal mine eyes restart by end 2023

Australian Pacific Coal (AQC) expects to restart the 5mn t/yr Dartbrook thermal coal mine in the Hunter Valley region by the end of this year, after it rejigged the joint venture and found an alternate offtake partner.

The mine, which has approval to operate until 2027, has been scheduled to restart multiple times over the past five years, including by the end of 2022. The restructuring of the joint venture sees AQC raising its stake to 70pc from 50pc, mining services firm Tetra Resources holding 20pc, mining accommodation firm Trepang Services relinquishing its stake for a minimum cash payment of A$5mn/yr ($3.3mn/yr), as well as mining and trading firm M Resources taking 10pc.

M Resources — the joint owner of the 1.2mn t/yr Millennium and Mavis Downs underground mine in Queensland — was to be the main coal marketing agent for Dartbrook, but AQC is negotiating an offtake agreement with a global coal marketing firm to secure a large proportion of the capital required to restart the mine. It is also working with other funding providers.

High thermal coal prices and a lack of alternative near-term high-quality new coal supply has raised the chance of the Dartbrook mine restarting this year.

Dartbrook was put on care and maintenance by previous owner UK-South African mining firm Anglo American in 2006, when the high-grade thermal coal price was as low as $50/t fob Newcastle for 6,000 kcal/kg NAR. Argus last assessed high-grade 6,000 kcal/kg NAR thermal coal at $184.98/t fob Newcastle on 28 April, up from $178.99/t on 31 March, but down from $195.53/t on 24 February and from a peak of $444.59/t fob on 9 September 2022.

Australian thermal coal exports were curtailed by an extremely wet weather in 2022, but prospects of a drier 2023 is growing, with the potential for an El Nino weather pattern developing bringing drought conditions to eastern Australia. Tetra has one year from the completion of funding to produce 50,000t of saleable coal at Dartbrook or its 20pc interest will return to AQC.

Dartbrook produced coal with 9-10pc ash content, 0.3pc sulphur and a calorific value of 6,200-6,300 kcal/kg before it was closed. AQC had hoped to restart the mine in 2019, but was delayed by opposition from local communities and a fraught approvals pathway.

By Jo Clarke

Australian thermal coal prices ($/t)