(Reuters) - Australian coal producer New Hope Corp expects to decide on whether to reopen a mine and develop an adjacent deposit by year-end, despite increasingly difficult conditions for the industry, its chief executive said on Tuesday.
New Hope, which operates several thermal coal mines in Queensland state and is moving forward with expansion plans at its New Ackland operations, bought the closed Burton mine and its infrastructure from Peabody Energy Corp in 2017.
Burton lies adjacent to New Hope’s long-held Lenton deposit, meaning an expanded project could be up and running relatively quickly, said Chief Executive Shane Stephan.
“Almost all the infrastructure is already in place. We are arranging both port and rail infrastructure access. And once we have obtained that, the board will make a go-forward decision,” Stephan told Reuters.
“We should be in a position to make a decision on that, all going well, this calendar year,” he said, after the miner announced its first-half results.
New Hope aims to restart the Burton mine, which was put on care and maintenance in late 2016, while it waits for final approvals for the Lenton thermal and metallurgical coal deposit to come through, he said.
Stephan said he did not anticipate any permitting issues despite last month’s court ruling against a new coal mine in a different state that took into consideration its potentially “dire” environmental impact.
“It is just a sign that it is getting incredibly difficult to gain approvals for even just a brownfield expansion of existing operations in Australia, let alone any new coal mines,” he said
Bank finance has also become more difficult to obtain and the make-up of lenders has changed, he said.
Many banks have sworn off financing new coal mines due to climate change concerns.
“We are seeing a move towards Asian banks (which) are certainly becoming more active financing resources development in Australia,” Stephan said.
New Hope raised A$600 million ($639 million) of debt in November, led by Australian banks, as well as a further A$300 million facility. Stephan declined to identify the lenders.
The miner posted a 4 percent rise in its half-year net profit to $120.2 million as revenue rose on stronger coal prices and an increased stake in the Bengalla coal mine, but its shares sagged as the pace of growth slowed.
The stock was last trading down 10 percent at A$3.97 a share, but was still up 16 percent this year.
Reporting by Ambar Warrick in Bengaluru; Editing by Leslie Adler and Richard Pullin