PERTH (miningweekly.com) – The Baralaba coal mine, in Queensland, has been placed on care and maintenance in order to preserve cash and the value of the asset, pending a restructure or sale of ASX-listed Cockatoo Coal.
Cockatoo went into administration in November last year, after an A$81-million bank guarantee facility from Australia and New Zealand Banking group was terminated in October.
The administrators had been working with Cockatoo’s management to fully understand the options available to the group, which could potentially include a restructure or recapitalisation of the group.
The Cockatoo administrators said on Tuesday that the decision to suspend mining at Baralaba was taken owing to an unsustainable level of cash outflows, which have been compounded by poor weather conditions that impacted production levels, as well as the current low coal prices.
The Baralaba mine produced an average one-million tonnes a year of coal, and an expansion plan at the mine had been aimed at increasing production to 3.5-million tonnes a year.
Meanwhile, the administrators noted that they had received a number of indicative proposals to restructure the Cockatoo group, which consisted of three related companies, namely Baralaba Coal, Wonbindi Coal and Cockatiel Coal.
It was noted that any proposal capable of resulting in a transaction would be subject to a formal report to creditors.