Ebenezer Coal Mine in Queensland One Big Step Closer to Reopening

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Researched by Industrial Info Resources Australia (Perth, Australia)--OGL Resources Limited (ASX:OGL) (Sydney, Australia) is one step closer to reopening the Ebenezer coal mine after a final appeal to overturn the company's mining lease was dismissed earlier this month. OGL Resources has been attempting to purchase the Ebenezer project from Zedemar Holdings Pty Limited since 2011, but the transaction has been delayed multiple times due to opposition from the local Ipswich community. With the final appeal being dismissed, OGL Resources can now focus on raising the funds required to bring the mine back into production.

The Ebenezer mine first produced coal in 1988, providing more than 20 million tonnes of coal during its 14 years of operation. It was closed in 2003 due to a drop in coal prices. The mine was eventually sold to Zedemar Holdings, with OGL Resources agreeing to purchase the mine in May 2011, but the sale was to be subject to a new mining lease being approved for the property. The mining lease was approved in September 2011, but local residents then challenged the validity of the approval, with the case eventually making it all the way to the Supreme Court.

While the case has been ongoing, OGL Resources has continued with the required preparations to bring the mine back into production, including sourcing a second-hand processing plant to be relocated and installed at the site. The initial plan was to install a small wash plant at the site, capable of producing 600,000 tonne per year of thermal coal, and then eventually expand the mining operations and wash plant to produce up to 1.5 million tonnes per year. OGL has now decided that it would be more economical to purchase the full 1.5 million-tonne-per-year wash plant immediately, giving it the ability to expand production as soon as all relevant approvals are in place.

With a final decision now having been made, OGL Resources is looking to fast-track the project's development. The company already has outlined its strategy to raise the funds required to complete the project purchase and bring the mine into production by mid-2014. OGL requires a total of $90.84 million (AUD$99 million) to bring the mine online, including $36.72 million (AUD$40 million) to finalize the purchase and $30.29 million (AUD$33 million) in equipment and capital costs, as well as site preparation costs.

OGL Resources also will be looking to further expand the mine within the next five years, with plans to double the size of the processing plant and expand mining operations into the adjacent Bremer View mining lease.

There are still many groups opposed to the reopening of the mine, due to its location very close to the town of Ipswich and less than 50 kilometers from the centre of Brisbane. With the region having a long mining history, however, there are also many supporters of the project, including locals who are excited with the prospect of new jobs and new funds flowing into the region.

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