Kestrel, Australia / Steelmaking coal
View on map
An underground steelmaking coal mine located in the Bowen Basin at Crinum, 51km north‑east of Emerald in central Queensland, Australia.
Producing
Steelmaking coal
Kestrel Coal Pty Ltd
Australia
Royalty rate and type
7–40% GRR
Balance sheet classification
Investment property
Key facts
$41.4m
Royalty contribution, with average coal prices of $223/t.
Kestrel is an underground coal mine located in the Bowen Basin, Queensland, Australia. It is operated by EMR Capital and PT Adaro Energy (‘EMR’ and ‘Adaro’). The Group owns 50% of certain sub‑stratum lands which, under Queensland law, entitle it to coal royalty receipts from the Kestrel mine.
The royalty rate to which the Group is entitled is prescribed by the Queensland Mineral Resources Regulations. These regulations currently stipulate that the basis of calculation is a six-tiered fixed percentage of the invoiced value of the coal based on the average realised coal price per tonne in the period, as follows: 7% of the value up to and including A$100; 12.5% of the value over A$100 and up to and including A$150; 15% of the value over A$150 and up to and including A$175; 20% of the value over A$175 and up to and including A$225; 30% of the value over A$225 and up to and including A$300; and 40% thereafter.
Kestrel has been the Company’s most important revenue-generating asset for many years. There are approximately three more years of mining expected in Ecora’s private royalty area. Cash flows have been directed to fund the Group’s transformation and Ecora will continue to recycle the cash generated by the Kestrel royalty into commodities that will support a sustainable future.
- Saleable production volumes within Ecora’s private royalty area totalled 2.1Mt (2023: 1.6Mt).
- Average realised prices of $223 per tonne (2023: $225 per tonne).
- Royalty income of $41.4m (2023: $35.9m).
- Saleable production volumes within the Group’s private royalty area are expected to be 5-10% higher in 2025 than those achieved in 2024.
- Production is primarily expected to be in the Group’s royalty area in Q2 and Q3 2025.
The Kestrel royalty is classified as ‘Coal royalties’ on the balance sheet and accounted for as an investment property. As such, this asset is carried at fair value by reference to the discounted expected future cash flows over the life of the mine.
Further details on the valuation can be found in note 15 of the financial statements. The independent valuation of Kestrel was undertaken by a Competent Person in accordance with the Valmin Code (AusIMM, 2005), which provides guidelines for the preparation of independent expert valuation reports.
The Group monitors the accuracy of this valuation by comparing the actual cash received to that forecast. The value of the land is calculated by reference to the discounted expected royalty income from mining activity, as described in note 15. As the asset has a nominal cost base, the carrying value almost entirely represents the valuation surplus. The Group recognises a deferred tax provision against the valuation surplus and, as such, the net value on the balance sheet is $34.1m (2023: $54.1m).