PERTH (miningweekly.com) – Capital cost estimates to restart the Dartbrook coal mine, in the Hunter Valley of New South Wales, have decreased by A$160-million to A$180-million, owner Australian Pacific Coal said on Tuesday.

Australian Pacific Coal is working with strategic partners M Resources and Tetra to fast-track an immediate 1.5-million-tonne-a-year operation, which will progress towards a nameplate capacity of six-million tonnes a year.

The company told shareholders that the proposed joint venture (JV) partners have estimated that the capital cost to restart the Dartbrook mine would be between A$100-million and A$120-million, with the capital expenditure (capex) to focus on critical path items to ensure that the operation is returned to a 1.5-million-tonne-a-year steady-state production.

Some A$80-million in capex at Dartbrook will be saved by leasing equipment, rather than purchasing new underground mining equipment, which would also accelerate the timetable, given new equipment lead times were greater than 18 months.

The potential JV partners also identified other areas of saving, including the coal handling and preparation plant and associated infrastructure, where repairs and replacements will be focused on the circuits to restart the plant at the initial production level without overhauling the plant to nameplate capacity.

The ventilation has also been identified as another area of cost saving, with the current ventilation system sufficient to support production in the Kayuga seam with minimum upgrades. Further restoration of the ventilation will be required in a scenario of multi-seam operations.

Substantial savings have also been achieved through the acquisition of second-hand drive units as part of the underground infrastructure, while all-new conveyor structures will be purchased.

Australian Pacific Coal on Tuesday said that operating costs for Dartbrook are expected to be in line with a conventional bord and pillar operation, where steady-state production is expected to have a cost of A$85/t to A$90/t.

Tetra has estimated that the pre-production phase at Dartbrook is likely to take seven to nine months to complete.

Meanwhile, M Resources is continuing to advance financing requirements for the restart programme, and debt funding is expected to be procured before Christmas.

The JV agreement has also been drafted, and negotiations were continuing to progress, and would likely be completed in the coming weeks, the company said.

Under the previously agreed strategic partnership, M Resources and Tetra would each earn a 20% direct joint JV interest in the Dartbrook mine, while shareholder Trepang Services would earn a 10% free-carried direct interest in the JV if it agrees to extend the existing access and compensation agreement with Australian Pacific, as well as agreeing to various easement arrangements and the transfer of water rights on mutually agreeable terms, that would allow underground mining to continue for the duration of mine life extension approvals.