Australian resources company Stanmore Resources has announced its decision to wind down operations at the Mavis underground coal project in Queensland, Australia.
The decision comes after a comprehensive strategic review, which concluded that the Australian underground coal project is uneconomic under the current market conditions and coal prices.
Besides, the Mavis underground project’s short mine life, higher costs, challenging ramp up and lower production volumes achieved to date have prompted the company to cease its operations.
The underground operation is part of the Millennium Complex, located 20km south-east of Moranbah.
Stanmore Resources and M Resources own the Millennium Complex via a 50-50 joint venture (JV). The asset was acquired from Peabody Energy Australia in July 2021 when it was under care and maintenance.
In line with the plans for the cessation of operations, Stanmore Resources has started discussions with the mining services contractor PIMS and associated consultation with the workforce.
The company plans to halt production operations at the Mavis underground project by the end of June. This will be followed by closure and sealing of the underground pit.
Stanmore Resources said that the Millennium Complex as a whole will reach a steady state minimum expenditure care and maintenance regime by the end of Q3 2024.
The proposed Millennium underground development option remains unaffected by this decision, said the Australian company.
However, its progression will be subject to the capital allocation and prioritisation strategy, adhering to the same internal investment criteria as other projects in the Stanmore Resources’ portfolio.
In April this year, Stanmore Resources completed the previously announced divestiture of the southern area of its Wards Well coal deposit in Queensland, Australia to coal producer Peabody.
