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Acacia Coal Limited (AJC)
is a publicly listed company on the Australian Securities Exchange (ASX).
About Acacia Coal Limited
Acacia Coal (ASX:AJC) is a publicly listed company on the Australian Securities Exchange (ASX) involved in coal exploration and mine development.
VISION AND INVESTMENT FOCUS
Its focus is on allocating capital to coal projects that are distinguished by:
- Quality of opportunity – They do not believe size of project is critical for a junior coal company
- The ability to achieve an ungeared, Post tax IRR of 30% in Australian dollar terms using mid cycle coal price and exchange rate assumptions
- No infrastructure spend of significance
- A preference for metallurgical coal, and niche markets with strong defensive pricing through the cycle
- Potential interest by strategic investors for project funding or eventual disposal
Acacia’s philosophy is that while the company is headquartered in Perth, its management must be close to its assets, and live “in country” to maintain the closest focus possible on operational delivery.
Bowen Basin Exploratuion
After progressively relinquishing or transferring a number of exploration permits (EPC 1319, 1505, 1580 & 1720) from August 2013 due to their very low probability of development and significant cost obligations to retain, the tenement portfolio comprises Exploration Permit for Coal – EPC 1230 Comet Ridge. which is located in the Comet – Blackwater region of Central Queensland (Figures 1 & 2).
The tenement is situated amongst several existing coal mining operations with easy access to existing rail and port infrastructure. Having been extensively explored by Acacia Coal since early 2011, resulting in the identifying and delineation of the Fair Hill and Triumph seams at shallow depths, the Comet Ridge Project is the company’s current main focus of activity.
EPC 1230 Comet Ridge
Exploration Permit (Coal) 1230 was granted on 10 September 2008. It initially consisted of 86 sub-blocks and after relinquishment of area in 2012 and 2013, it currently (at Dec 2013) comprises 31 sub-blocks. The tenement is located in Queensland’s Bowen Basin and covers a structural dome (the Comet Anticline) interpreted to host the coal measures of the Lower Permian German Creek, Fair Hill and Burngrove sequences.
EPC 1230 has a high potential for coal resources amenable to surface and underground mining similar to the adjacent Washpool Project (Aquila Resources “AQA”) and McKenzie River Project (Stanmore Coal “SMR”). The tenement is surrounded by the existing Ensham, Jellinbah East, Blackwater (BMA) and Curragh (‘WES”) operating coal mines in the Rangal Coal Measures that produce thermal and coking coal products. Bandanna Energy’s (“BND”) Springsure Creek Project is located some 25 kms to the west.
Exploration at EPC 1230 has focused on the shallow Fair Hill coal sequence in the southern area of the tenement. Previous drilling by Ingwe Australia Pty Ltd (1996) intersected coal seams within the Fair Hill Formation including hole references CR005 (9.89 metres from 53.5m) and CR007 (5.99 metres from 5.3m).
During 2011, a total of 60 holes were drilled by Acacia in the initial exploration programme which successfully intersected coal over a significant area in the southern portion of the tenement which identified:
A multi-ply, banded coal seam ranging from 5 to 14 metres in thickness, present from surface to greater than 120 metres vertical depth; and
A second coal seam (Triumph) was intersected some 25 metres stratigraphically below the Fair Hill seam.During 2012, an extensive delineation drilling programme comprising 137 holes for a total of 5,001 metres targeting both seams was completed, which resulted in Maiden (20 Oct 2011) and Update (7 Dec 2012) JORC Resource Reports.
Riversdale Anthracite Colliery (RAC) Project
The RAC project has a Mining Right, and is in the process of finalising the submission of a Water Use Licence application.
The RAC project covers an area of 2,176 hectares and is located in the southern portion of the Vryheid Coalfield near the magisterial district of Vryheid in Kwa-Zulu Natal, South Africa.
South African Anthracite
What is Anthracite
DEMAND FOR ANTHRACITE
South Africa exhibits a unique demand profile.GLOBAL ANTHRACITE DEMAND BY USE/APPLICATION
Global annual demand in 2016 for metallurgical anthracite is estimated to be 115Mt, with the ferrous sector accounting for over 80%.SOUTH AFRICAN ANTHRACITE DEMAND BY INDUSTRY
By comparison South Africa’s anthracite demand in 2016 was 2.1Mt of which 98% was consumed by the non-ferrous sectors.
SOUTH AFRICAN ANTHRACITE PRODUCTION
MINE CLOSURES, DECLINING PRODUCTION, DETERIORATING QUALITY AND RISING COSTS
The industry decline is occurring in an environment of increasing demand from a globally competitive ferroalloy industry driven by a lack of viable anthracite projects – RAC is the last known long-life, high quality anthracite project in South Africa.
- The declining production profile is attributable to the depletion of viable resources, growing geological complexity of established mines and challenging quality.
- Ferrochrome, electrode paste, ilmenite and calcium carbide markets are particularly sensitive to impurities and require Sulphur<1%, and phosphorous <0.015%. At least one major competitor can no longer consistently provide this specification.
- The local ferrochrome market has been accepting up to 18-19% ash in order to keep low impurity mines viable.
- High sulphur/phosphorous mines are dependent upon the ferromanganese and export markets.
- All producers are benefiting from the growing market for exports of up to 35% ash anthracitic coal.
- No significant new projects or expansions are scheduled in South Africa.
Acacia Coal Limited
16 Ord Street
West Perth, WA
+61 8 9482 0520
The General Overview, Services, Products and Projects information for this profile was last edited on 24 Oct 2017.