JOHANNESBURG (miningweekly.com) - The granting of the Isaac Plains East (IPE) mining leases and the Commonwealth Environment Protection and Biodiversity Conservation approval for the project is a significant milestone for ASX-listed junior coal miner Stanmore Coal.

It provides the company with a de-risked path to a significant increase in value for shareholders with a low capital cost progression into a longer life and lower cost mining area, the company announced on Monday.

The grant of the IPE mining leases supports the extension of the life of the Isaac Plains Complex as the IPE has Joint Ore Reserves Committee- (Jorc-) compliant run-of-mine (RoM) reserves of 11.09-million tonnes, which will be processed at the existing coal handling and preparation plant and using train load out infrastructure at Isaac Plains, which aligns with Stanmore's strategy to capitalise on low-cost assets and a capital light approach.

Production at IPE is expected to start early in the first quarter of the 2019 financial year, which aligns with Stanmore's intention to boost production in by 50% to 1.8-million tonnes that year.

The IPE mining leases also cover part of the proposed Isaac Plains Underground operation, which has progressed into a bankable feasibility study with ASX-listed Mastermyne Group.

"The proposed production plans and the successful progression of both projects allows Stanmore to take another significant step forwards towards our objective of 3.5-million tonnes of RoM for the complex over the next two years," said Stanmore MD Dan Clifford on Monday.

He added that the IPE mining lease grant supports the continued direct employment of 210 people in the Moranbah district, providing about $75-million in additional state royalties over the life of the operation.

The high-quality semisoft coking coal produced at IPE will be shipped from Dalrymple Bay Coal Terminal and sold primarily into quality Asian steel mills.