Aquila Resources has resolved its legal issues with Brazilian mining giant Vale over the Isaac Plains coal mine in Queensland.
Aquila said its subsidiary, IP Coal, had entered into a new lifting agreement with Vale regarding Isaac Plains coal and agreed to discontinue a damages claim today.
"Resolution of these two key issues assisted the parties in also reaching agreement on approval of the budget for Isaac Plains for the current financial year," Aquila chairman Tony Poli said in a statement.
Mr Poli said the two companies would now focus on delivering value from the Isaac Plains project to respective shareholders.
Aquila, which is in the ASX-100, launched legal proceedings against Vale last July for four shipments it says Vale stopped from being exported.
Both parties have a 50 per cent stake in the mine and the dispute related to terms of coal sales and an inability to negotiate a marketing agreement.
Gross profit from Isaac Plains mine in Queensland rose to $29.7 million last year from $11.2 million in 2009/10.
However the cancelled shipments weighed more than 200,000 tonnes and were worth tens of millions of dollars to Aquila, with the mine its only cash generating producing asset.
Aquila is currently in negotiations to sell its Washpool coal project in Queensland to an Indian consortium in what is believed to be a $301 million deal.
Aquila's and Vale are also battling each other in disputes about two other as-yet undeveloped coal projects in Queensland.
Shares in Aquila closed up three cents to $4.98 last Friday.
