Bandanna Continues Talks for Partners With Approval Pending

Bandanna Energy Ltd., an Australian coal developer, is continuing talks with potential partners for its power-station coal project on expectation it will soon get a government environmental approval.

The environmental go-ahead, which has taken about three years, is expected early next month, Michael Gray, managing director of Brisbane-based Bandanna, said in an interview in Singapore.

“One of the key concerns for investors is environmental approvals so it’s most likely a joint venture won’t be finalized until the final environmental approvals are in place,” Gray said yesterday. “That’s something we’ll continue to negotiate over the next three to five months.”

Bandanna said last month it’s in talks with Korea Midland Power Co., a unit of Korea Electric Power Corp., to sell a partial stake in Springsure Creek, which is expected to deliver first coal production in 2015. The most advanced talks are with power generators in Korea, Japan, Taiwan and China, Gray said.

Bandanna may retain 50 percent to 60 percent of the project with the balance held by two to four potential partners, he said. Partners in the project are likely to be customers, strategic partners or traders, Gray said.

The stock has slumped 19 percent this year in Sydney trading, compared with a 10 percent advance in the benchmark Australian index.

The Springsure Creek project is located in the Bowen Basin in Queensland state, Australia. Rio Tinto Group is selling its Blair Athol mine, also located in the Bowen Basin, to Linc Energy Ltd. for a dollar after closing the mine in November as thermal coal prices slumped.