The owners of the mothballed Dartbrook coal mine in the Upper Hunter, NSW, have unveiled a $300 million plan to restart the mine within 18 months as a fourth party enters the bidding war.
The controversial mine has been under care and maintenance since 2006 after a series of accidents and low coal prices.
Now the owners, Australian Pacific Coal (AQC on the Stock Exchange), have told investors they hope to take "first coal" in the mine's new life by the end of 2023.
After 16 years sitting idle, the company estimates the "replacement value of infrastructure exceeds $300 million" but sees a "robust market outlook".
AQC told investors during a presentation this week that the mine had historically produced "high-quality thermal coal" and expected significant demand from Asia and India "to continue to 2030".
"This underpins a resilient, forward-looking thermal coal price in Australia, further supported by Russian supply substitution and increases in demand for steel infrastructure," a shareholder presentation reads.
Big costs, big returns forecast
AQC has a licence to extract six million tonnes of coal each year at the Dartbrook site until December 5, 2027.
In 2019, the NSW Independent Planning Commission gave AQC the green light to restart the Dartbrook mine, but it refused a five-year mining extension.
That was overturned earlier this year despite years of fierce community opposition.
Coal prices have been historically high in recent months, currently about $US420 per tonne ($622).
AQC-sought predictions show prices should remain above $US250 per tonne ($370) until the end of 2027, when Dartbrook's mining licence runs out.
At that lower forecast, AQC could still be selling more than $US1 billion of coal a year ($2.2 billion).
The mine is now tabling four offers for all or part of the company, including two from companies fronted by former Dartbrook owner and mining magnate Nathan Tinkler.
The company is currently also working to source $100 million to pay off outstanding debt, through its investors.
The NSW Greens MP and mining spokesperson Sue Higginson says the move to reopen the mine is "just recklessness".
"We know what the international community is telling us about coal ... we also know what the climate experts are telling us about burning more coal and carbon emissions," she said.
Ms Higginson says there is significant local opposition to the mine.
"The thoroughbred breeders have put forward a valid and valuable case on why this mine would damage the environment for a sustainable industry breeding horses that is set to be in the Hunter Valley for the long term," she said.
"This is a short-term money grab while we have seen the coal price rise due to the war in Ukraine."
She says the federal government and the NSW government should step in and stop the mine from being reopened.
