Australia's Whitehaven faces new delay on key coal project

MELBOURNE Wed Feb 6, 2013 6:21pm EST

MELBOURNE Feb 7 (Reuters) - Whitehaven Coal suffered a fresh delay on its key Maules Creek project on Thursday when the Australian government said it would postpone a decision on whether to approve the development, sending the miner's shares down 5 percent.

Whitehaven said in November it planned to bring the mine into production by the first quarter of 2014, but that was before the latest delay on the project it acquired with its takeover of tycoon Nathan Tinkler's Aston Resources last year.

"We are extremely disappointed at this further delay to this important project," Whitehaven Managing Director Mr Tony Haggarty said in a statement.

The federal government had extended the timeframe for reaching a decision to April 30, he said.

Maules Creek won state approval last October, two years after the approval process began. But the proposed mine continues to be the target of environmental protests, with a group called Frontline Action on Coal having camped out near the site for five months.

The group attracted attention in January when it sent out a hoax media release that said Australia and New Zealand Banking Group had withdrawn a A$1.2 billion ($1.24 billion) loan for the project, which briefly sent Whitehaven's shares down 9 percent.

Maules Creek is 15 percent owned by Japanese trading house Itochu Corp and 10 percent owned by Japan's Electric Power Development Co (J-Power), which has an agreement to take coal from the mine.

The mine is key to Whitehaven's goal of quadrupling its output to 25 million tonnes a year by 2016.

Whitehaven's shares fell 5.3 percent to A$3.02 after the announcement, a two-month low. ($1 = 0.9691 Australian dollars) (Reporting by Sonali Paul; Editing by Richard Pullin)