Aquila Resources and Sumitomo will form a joint venture to explore Aquila’s significant portfolio of coal exploration permits in Queensland. The Memorandum of Understanding (MoU) between subsidiaries of both companies, Argos and Sumisho Coal Australia, does not include the Washpool hard coking and Talwood coal projects.

It does provide for the acquisition by Sumitomo of between 25-50% in the Aquila tenements at its election, based on a valuation by an independent expert. Aquila will manage the joint venture with the aim of identifying and developing commercially mineable coal resources.

Sumitomo’s Australian business established in 1961 and is now made up of a diverse portfolio of investments in mining and industrial markets. It also has existing joint ventures in thermal and metallurgical coal mines in Queensland’s Bowen Basin.

Aquila says entering the MoU and joint venture arrangement with a highly regarded and well aligned partner will greatly help it to achieve the development of its coal projects. Since its first exploration in 2003, the company has discovered the producing thermal and coking coal mine at Isaac Plains, tier 1 deposits at Eagle Downs and Belvedere, an open pit hard coking coal deposit at Washpool and a large underground deposit at Talwood.

Aquila’s executive chairman Tony Poli says, “Combining Sumitomo’s financial strength and experience in producing coal joint ventures with our high quality exploration portfolio and strong management team will allow Aquila to maximize the potential of its exploration portfolio.”