Anglo American’s Board of Directors approved the Aquila project to extend the life of the Capcoal underground (Grasstree mine) hard-coking coal operations in Queensland, Australia, by six years, to 2028. With an expected attributable capital cost of $226 million, development work is expected to begin in September with first longwall production of premium quality hard coking coal in early 2022.
“Aquila offers us a high margin six-year life extension to our Grasstree mine, with an average annual saleable production of 3.5 million metric tons (mt) of attributable premium quality hard coking coal at a real, post-tax IRR of more than 30%, and an EBITDA margin of 40% at consensus long term prices,” CEO of Bulk Commodities for Anglo American Seamus French said. “The project benefits from low-capital intensity as we can use the existing infrastructure and systems from our adjacent Grasstree mine that is coming toward the end of its economic life, as well as providing continuity of employment for our workforce.”
The Capcoal complex includes the Capcoal open cut and Grasstree underground operations, both managed by Anglo American. The underground operations are owned 70% by Anglo American and 30% by Mitsui & Co. Ltd. The project is also subject to approval by Mitsui. In 2018, the Capcoal open cut produced 2 million mt of metallurgical coal products and Grasstree underground produced 3.6 million mt of hard coking coal (attributable). The Capcoal open-cut operations have a reserve life of 20 years.
