Bright outlook for Bowen Coking Coal projects

Bowen Coking Coal’s ambitions to become a low-cost, high-quality coking coal producer within the next few years have received a boost from scoping studies for two of its Bowen Basin assets. Scoping studies for the Broadmeadow East and Isaac River open‐cut coking coal projects indicated a peak annual production of 1.7 million tonnes per annum and have shown their potential to generate significant cashflow, Bowen Coking Coal says. The company has set the wheels in motion to enable development in the first quarter of next year should the Board give the new mines the go-ahead. Bowen Coking Coal said the results of first-stage independent scoping studies had indicated a run of mine (ROM) production target of 0.8 million tonnes per annum to 1.1Mtpa over a five to seven year period for Broadmeadow East, and 0.4Mtpa to 0.6Mtpa over a four to five year period for Isaac River. Bowen Coking Coal managing director and chief executive officer Gerhard Redelinghuys said the first stage production target results were a strong confidence boost. “The results are a clear stepping stone to fulfill Bowen’s aspirations to become a low‐cost independent producer of high‐quality coking coal,” Mr Redelinghuys said. “The combined projects have the potential to generate significant amounts of cashflow in the light of recent price recoveries and relatively low capital requirements, which may allow us to advance our larger projects. "These studies will now be optimised in preparation for a Final Investment Decision (FID).” Mr Redelinghuys said demand for higher-quality metallurgical coal like Bowen’s was increasing following environmental reforms in China’s steel industry, while growing steel production capacity in India, Vietnam, Malaysia and Indonesia was also expected to support demand for the company's products. Broadmeadow East would cost $6-$8 million to bring online, while Isaac River would require an initial capital expenditure of $14-$17 million. In both cases the company said operational readiness planning would commence in Q3 2021 to allow a swift FID process which could enable development in Q1 2022. Bowen Coking Coal stressed that a final decision on whether or not to commence with mine development rested with the Board of Directors and was subject to many contributing decision factors. Isaac River is about 30km east of Moranbah while Broadmeadow East is about 25km north-east of that town. Bowen Coking Coal acquired the Broadmeadow East coking coal project from Peabody Energy in September last year for $1 million cash plus royalties of up to $1.5 million. It sits within a granted mining lease. The company has mining lease applications in progress for the Isaac River project, with the period for public objections closing on August 18. Mr Redelinghuys said that an environmental application Isaac River, along strike of BMA’s Daunia mine, had been submitted and approvals were expected in the second half of this year. Final permitting and decision to mine is also planned for later this year for the company’s flagship Broadmeadow East project which is located in close proximity to several major mines including Peabody’s Coppabella mine and BMA’s Broadmeadow mine.

Bright outlook for Bowen Coking Coal projects

Industry Queensland

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