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The Anglo American Board has given the go-ahead for the $415 million-plus Aquila coal project to extend the life of the Capcoal underground operations in Central Queensland.

Development work is expected to begin in September, with first longwall production of premium quality hard coking coal in early 2022.

Anglo CEO of bulk commodities Seamus French said the Aquila project offered a high-margin avenue to extend Grasstree mine operations by six years.

“The project benefits from low capital intensity as we can use the existing infrastructure and systems from our adjacent Grasstree mine that is coming towards the end of its economic life, as well as providing continuity of employment for our workforce,” he said.

The mine is expected to have a peak workforce of about 600 people, including employees and contractors.

It will have a total average annual saleable production of about five million tonnes of premium quality hard coking coal.

The expected capital cost of the development is about $320 million ($US226 million) for Anglo American’s share and a total cost of about $416 million. The Aquila project is also subject to approval by joint venture partner Mitsui.

Chief executive officer of Anglo American’s Metallurgical Coal business, Tyler Mitchelson said the Aquila operation would continue to adopt Anglo American’s FutureSmart MiningTM program.

“Anglo American has been at the forefront of embracing innovation to drive the next level of mine safety and performance, and our Aquila Mine will be developed as one of the most technologically advanced underground mines in the world,” Mr Mitchelson said.

“We will pursue remote operation of the Aquila longwall, ensuring our people are removedfrom harm’s way, and the continued digitisation of our operations, using new technologies such as our Australian-first intrinsically safe underground electronic tablets.

“The accelerating pace of technological innovation, particularly in the digitalisation, automation and artificial intelligence areas, are opening up opportunities for the mining sector to be safer, more productive and sustainable.

The Capcoal complex includes the Capcoal open-cut and Grasstree underground operations, both managed by Anglo American.

The underground operations are owned 70 per cent by Anglo American and 30 per cent by Mitsui.

In 2018, the Capcoal open-cut mine produced 2 million tonnes of metallurgical coal products and Grasstree underground produced 3.6 million tonnes of hard coking coal (attributable).

The open-cut operations have a reserve life of 20 years, as at December 31 2018.

Anglo ready to launch Aquila coal project