Bandanna negotiates Springsure Creek deals

23rd September 2013 By: Esmarie Iannucci - Creamer Media Senior Deputy Editor: Australasia

PERTH ( – Coal developer Bandanna Energy has signed a heads of agreement with Korean electricity generator Korea Midland Power (Komipo) for a potential equity investment in the Springsure Creek thermal coal project, in Queensland.

The agreement would see the two companies progress discussions regarding possible investment levels and long-term coal offtake agreements.

“As demand for thermal coal for power generation in Asia is predicted to more than double within the next decade, stable import of quality thermal coal has become a key long-term imperative for Asian power generators,” said Bandanna MD Michael Gray.

He noted that the Springsure Creek project was uniquely placed among Australian greenfield projects to deliver stable long-term supply, owing to its resource size, location, contracted infrastructure, advanced approvals process and competitive capital and operating cost structures.

Bandanna had previously reported that a capital investment of some A$743-million would be required for the Stage 1 development of the Springsure project, which would deliver some 5.5-million tonnes a year of coal.

Stage 2, which would increase production to 11-million tonnes a year, would require an additional capital investment of A$437-million.

Komipo is expanding its generating capacity by more than 3 000 MW by 2019, and its coal demand is expected to increase from 13.6-million tonnes a year to more than 24-million tonnes a year during this period.

Meanwhile, Gray noted that Bandanna was also progressing discussions with other coal customers and investors in relation to offtake and investment opportunities.