PERTH (miningweekly.com) – Dual-listed coal miner Coalspur has signed a definitive agreement with TSX-listed Canadian National Railway (CN) to transport thermal coal from its Vista project to tidewater.
The seven-year agreement, effective from January this year, and extending through to the end of December 2019, would see CN supplying the equipment to carry Coalspur’s coal from mine site to port.
Some 12-million tons a year of coal would fall under the contract.
Coalspur said on Wednesday that as a result of the contract, the company was able to confirm that its logistics costs for the Vista project would remain as projected, with operating costs estimated at C$56.98/t for the first five years of production, C$59.55/t for the first ten years of production, and C$66.40/t over the life of the mine.
“We are very pleased to have finalised these contracts with CN,” said Coalspur president and CEO Gill Winckler.
“The agreements provide further clarity and stability over our operating costs in the initial years of mining at Vista. Rail and port logistics costs account for around 50% of Coalspur’s free-on-board cash costs, which are now under contracted rates.”
Winckler noted that the company was in the final stages of its detailed negotiations for its funding arrangments for the Vista project, and remained engaged with regulatory agencies to secure regulatory approvals for Phase 1 of the Vista project, which would enable construction to start in the second quarter of this year.
The Vista project was designed to reach a maximum clean coal production rate of 12-million tons a year, and had a life-of-mine expectancy of 29 years. The project would be developed over two phases, with Phase 1 consisting of two discrete stages.
The first stage would produce three-million tons a year of clean coal at a capital cost of approximately C$527-million and the second would provide for a further two-million tons a year of production.
Phase 2 would add an additional seven-million tons a year to take Vista to its maximum design capacity of 12-million tons a year by 2019.