Aquila Resources Ltd., said an initial study estimated the cost of its planned Eagle Downs coking joint venture with Vale SA in Australia at A$1.2 billion ($1.3 billion).
The project in Queensland state is expected to produce an average of 4.5 million metric tons of coal annually from 2016, Perth-based Aquila said today in a statement. A decision to develop may be taken around April 2012, it said.
Aquila and Vale have applied to ship coal through proposed expansions at the Wiggins Island, Abbot Point and Dalrymple Bay export terminals, with the first being the preferred option, the company said. Wiggins Island is expected to start shipping in 2014 with an annual capacity of 27 million tons, later rising to about 80 million tons as part of a second stage expansion.
The feasibility study can’t be completed “due to a lack of a logistics solution and firm off take arrangements,” the company said.
Aquila rose 1.7 percent to A$8.49 at 11:28 a.m. Sydney time on the Australian stock exchange.