Involving a capital cost of $226m (£182m), the development work at the project is expected to start in September 2019
Image: The project involves a capital cost of $226m (£182m). Photo courtesy of PublicDomainPictures from Pixabay.
Anglo American announced that the board of its Aquila project has approved the extension of life for the Capcoal underground (Grasstree mine) hard coking coal operations in Queensland, Australia.
The development work at the project is expected to start in September 2019, and the first longwall production of premium quality hard coking coal is expected in early 2022.
Project to extend life of Grasstree mine to 2028
Involving a capital cost of $226m (£182m), the project is expected to extend the life of the Capcoal underground hard coking coal operations by six years to 2028
The Capcoal complex includes the Capcoal open cut and Grasstree underground operations and both the operations are managed by Anglo American.
In the underground operations, Anglo American holds 70% and Mitsui holds 30%, and the project is also subject to approval by Mitsui.
The company said that its Capcoal open cut produced 2 million tonnes of metallurgical coal products and Grasstree underground produced 3.6 million tonnes of hard coking coal in 2018. The Capcoal open cut operations hold a reserve life of 20 years, as of 31 December 2018.
Anglo American bulk commodities CEO Seamus French said: “Aquila offers us a high margin six-year life extension to our Grasstree mine, with an average annual saleable production of 3.5 million tonnes (attributable) of premium quality hard coking coal at a real, post-tax IRR of more than 30%, and an EBITDA margin of 40% at consensus long term prices.
“The project benefits from low capital intensity as we can use the existing infrastructure and systems from our adjacent Grasstree mine that is coming towards the end of its economic life, as well as providing continuity of employment for our workforce.”
In May 2019, Anglo American announced the opening of the completed Unki Mine smelter at its mine in Shurugwi, Zimbabwe.
The custom-designed, cost-efficient smelter is set to meet the current production of Unki and retains the capability for later upgrades for increased mine production in the future.
The scope of the facility includes the primary smelting of Unki concentrate which is crushed on site and transported to the converter process facility in Rustenburg, for further processing.