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Key PN contract down in Bandanna collapse

<span class="" id="parent-fieldname-description"> A 15-year take or pay deal for Pacific National Coal is on the rocks, as prospective coal miner Bandanna Energy has gone into voluntary administration. </span> <p>The mining company’s board failed to come to a working agreement with creditors over funding, and decided to shut up shop this week.<br /><br />The15-year deal with Bandanna would have seen PN Coal taking 4mt of coal to Wiggins Island per annum<br /><br />Bandanna is one of the eight ‘stage one owners’ of the Wiggins Island Coal Export Terminal (WICET), the planned – but embattled – project designed to ramp up coal capacity at the Queensland port of Gladstone by almost double.<br /><br />But the company will likely no longer take part in that development, with administrators PPB Advisory appointed by the board on Monday.<br /><br />Since June, Bandanna had been in negotiations with Credit Suisse to restructure the agreement designed to secure take or pay obligations for WICET port access and for rail access, to export coal from its planned Springsure Creek coal project.<br /><br />“Negotiations with Credit Suisse have been both extensive and cordial however the board, after significant deliberations, determined by majority decision that an agreement with Credit Suisse could not be reached,” the company told the ASX on Monday.<br /><br />The Bandanna board said it has “vigorously” explored alternative funding sources, including from Credit Suisse, existing and potential new major equity investors and also explored opportunities for binding commitments to asset sales, but now has been left with no choice but to go into voluntary administration.<br /><br />Chairman John Pegler dissected the situation.<br /><br />“Over the past few years, the BND Group has made substantial progress towards the development of the Springsure Creek project including obtaining EIS Approval from the Queensland Government, environmental approval from the Commonwealth Government and broad support from the local community and Local Government,” he said.<br /><br />“Unfortunately, progress has been impacted by delayed approval of the Springsure Creek mining lease and the deepening cyclical decline in seaborne thermal coal prices, which together have further exacerbated delays in investor interest and participation.”<br /><br />Acacia Coal, which is partnered with Bandanna in the proposed Triumph Creek Train Loading Facility at Comet Ridge – which was to be a part of the Springsure Creek mine’s export operation – says it is seeking an urgent meeting with PPB Advisory on the matter.<br /><br />WICET chief executive Robert Barnes yesterday said the terminal’s development was on track to start exporting coal in November, despite the loss of one of its members.</p>