MetroCoal, a Brisbane-based coal company has signed an agreement with Tenement-to-Terminal to acquire up to 15 million mt of export capacity in the unlisted Australian company's planned coal terminal at Gladstone port. With stage two capacity in the Wiggins Island coal terminal hard to come by, the company decided to pursue "all opportunities," MetroCoal CEO Mike O'Brien said in a statement Tuesday.
"Port capacity for the export of coal from the southern Surat and Bowen Basins is at a premium. However, with Wiggins Island export coal terminal significantly over-subscribed in stage two of its expansion, we must pursue all opportunities," O'Brien said.
Tenement-to-Terminal has acquired a 134 hectare freehold site in the Yarwun precinct of Gladstone port next to the proposed Wiggins Island terminal which has a first-stage completion date of 2014.
Tenement-to-Terminal plans to carry out a study to test the feasibility of building a 75 million mt/year coal terminal on its Yarwun site, with an initial 25 million-30 million mt/year stage ready to ship coal by the end of 2016.
MetroCoal's agreement entitles it to 11.4 million mt/year of terminal capacity in Tenement-to-Terminal's export facility subject to MetroCoal meeting various commitments, including development of its mining projects and eventual take-or-pay contract.
An additional 3.5 million mt/year of capacity will be available to MetroCoal's Columboola joint venture with SinoCoal Resources, subject to further investment by the Chinese company in Tenement-to-Terminal.
In exchange for the export capacity, Tenement-to-Terminal will receive 25 million shares in MetroCoal to be vested over the next four years.
MetroCoal has bought a 20% stake in Tenement-to-Terminal for A$3.5 million which will be used to fund an initial 25 million mt/year stage of the terminal.
MTE Price at posting:
71.0¢ Sentiment: ST Buy Disclosure: Held
