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Moreton’s Coal ‘Too Expensive’

Filed under Breaking News, Business, Front3, Latest News

Stanwell CEO Richard Van Breda

February 26, 2016

Stanwell has rejected suggestions that coal from Moreton Resources’ proposed mine near Coolabunia would be cheaper; in fact, the change could cost the corporation millions of dollars, says CEO Richard Van Breda.

Mr Van Breda said it would not be in Stanwell’s commercial interest to source more expensive coal from Moreton Resources’ proposed project.

Stanwell has repeatedly said that it has more than enough competitive cost coal at Meandu to supply Tarong’s power stations until the end of their economic lives.

Mr Van Breda referred to Moreton Resources Pre-Feasibility Study to the ASX on December 21, 2015.

He said this had included significantly overstated fuel costs for Tarong Power Station, which in combination with Moreton’s own projected fuel costs, created a misleading impression that their project could save Stanwell millions of dollars.

“The reality is that Moreton Resources’ projected coal costs are higher than Stanwell’s current fuel costs so their project would end up being a liability for Stanwell if we entered into a coal supply agreement with Moreton,” Mr Van Breda said.

He said the Pre-Feasibility Statement included the following: “This project will only progress if a long-term government contract is secured to supply our high energy thermal coal product to a State-owned power generator for the first 20 years of mine life …”

“As that comment is presumably a reference to Stanwell, I should make it clear to the community that over the past two years Stanwell has reviewed Moreton’s developmental challenges and projected costs and I have met with Moreton Resources twice and written to them a further three times,” Mr Van Breda said.

“I have advised them that Stanwell has no need for, or interest in, coal sourced from Moreton’s proposed project.

“Moreton Resources’ recent Pre-Feasibility Study confirms the correctness of that assessment.

“Developing a mine requires a significant investment in the approvals process, land acquisition, mine infrastructure and fleet and would require a corridor to transport the coal 25km to the power station.

“Not only do Moreton’s estimates seem underdone in this regard, but why invest in infrastructure when it is not needed as we already have a very well run and cost-competitive mine?

“We own Meandu Mine, we own the infrastructure and the equipment and we have a mine plan that provides us with the flexibility to compete in the dynamic and highly challenging wholesale electricity market when conditions change.”

Mr Van Breda described Moreton’s claims that they could receive the relevant regulatory approvals within 18 months as “unrealistic”, and suggestions the project would create between 300-500 jobs as “misleading”.

“As an example of the complex and thorough process covering mining tenements, Stanwell has been working on the approvals for a relatively simple extension to the area of mining operations within our existing Meandu mining lease for the past two years,” Mr Van Breda said.

“Sourcing coal from Moreton Resources’ proposed mine would require Meandu Mine, which currently employs 400 people, to close, so the claim that the Moreton project would create additional jobs for the community is unfounded.

“From a Stanwell point of view, maintaining our Meandu mining operations remains in the best commercial interests of Stanwell and Stanwell’s Board, management and people will not be distracted from focussing on this objective.”

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