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Cockatoo Coal completes feasability

Cockatoo Coal Limited has announced the completion of its bankable feasibility study for the Baralaba Expansion project, confirming the attractive economics of its simple open-cut brownfield development. The study confirmed that the project will increase production from 750ktpa to 3.5Mtpa of saleable ULV PCI coal and have a project life in excess of 20 years. The comprehensive coal quality drilling and testing program, combined with independent testing and verification, confirmed that the project will have an attractive product yield of 85% and an improved product mix producing 100% high value ULV PCI coal.

Cockatoo's Managing Director, Andrew Lawson, stated "The increased production, improved product mix, and high yield will firmly position Cockatoo as a significant producer in the global PCI market".

Extensive project development work was undertaken as part of the feasibility study, underpinning increased confidence in the expansion. Both Baralaba North and South will be run as open-cut, truck and shovel operations, with ROM coal from both being processed at the CHPP located adjacent to Baralaba South. At full production, the Baralaba Expansion will produce ~4.2Mtpa of ROM coal at an average LOM strip ratio of 10.5:1.

Mr Lawson noted that "The finalisation of the bankable feasibility study is an important milestone for Cockatoo. It highlights the compelling project economics that exist at Baralaba which will enable Cockatoo to successfully navigate the current challenging global environment and position ourselves for better times ahead."

Coal from Baralaba North will be transported via road to the CHPP, and all product coal from Baralaba North and South will be hauled 40km by road to a stockyard and Train Load Out facility on the Moura line, near the Dawson Mine. Cockatoo has secured necessary rail and port capacity for the expected 3.5Mtpa of product coal, which will be exported via the port facilities at Wiggins Island and RG Tanna at the Port of Gladstone.

The bankable feasibility study estimates Cockatoo's share of total outstanding development capital expenditure to be A$330m (excluding contingency), with further identified potential cost savings. The study also indicates that the Baralaba Expansion's life of mine steady-state FOB cash costs will be approximately A$105/t FOB (excluding royalties), positioning the project as a competitive producer relative to other Australian metallurgical producing and development projects.

Cockatoo continues to progress project approvals, having submitted the Environmental Management Plan for Baralaba North, and now finalising the Environmental Impact Statement for Baralaba South which the

Company plans to lodge in Q1 2013. The Environmental and Mining Lease approvals process for Baralaba North remains on schedule for Q1 2013.

Cockatoo engaged Behre Dolbear Australia (BDA) to conduct an independent technical review of the bankable feasibility study. BDA has reviewed a near final draft of the bankable feasibility study and confirmed the validity of the key inputs. BDA is expected to complete its review of the final bankable feasibility study over the coming weeks.