Como-based mining company Aquila Resources Ltd has failed in an attempt to gain control of iron ore and coal joint ventures after the Supreme Court of Queensland ruled againt its application.
Como-based mining company Aquila Resources Ltd has failed in an attempt to gain control of iron ore and coal joint ventures after the Supreme Court of Queensland ruled againt its application.
The complex case flowed from the decision by Aquila's joint venture partner AMCI to sell its interest in the jont ventures to Brazilian mining giant CVRD.
Aquila argued, unsuccessfully, that the the restructuring resulted in a change of control, which would have entitled it to acquire AMCI's joint venture interests.
An Aquila announcement is pasted below:
LEGAL PROCEEDINGS RELATING TO THE AMCI RESTRUCTURE
On 2 April 2007, Aquila Resources Limited ("Aquila") reported that, in conjunction with the sale of AMCI Holdings Australia Pty Ltd to Companhia Vale do Rio Doce ("CVRD") on 26 February 2007, Aquila was informed that the AMCI group of companies ("AMCI") had restructured the AMCI interests in the Australian Premium Iron Joint Venture and the Belvedere Coal Joint Venture, in which two of Aquila's subsidiaries ("Aquila Subsidiaries")
respectively hold 50% venture interests.
On 26 April 2007, Aquila reported that the Aquila Subsidiaries had commenced proceedings in the Supreme Court of Western Australia seeking declarations that, in respect of the two joint ventures, there had been a Change in Control as a result of the AMCI restructuring.
AMCI had also commenced proceedings in the Supreme Court of Queensland seeking declarations that the AMCI restructuring did not result in a Change in Control.
Aquila and AMCI consented to orders to have the dispute determined by the Supreme Court of Queensland and the hearing was conducted on 16 and 17 August 2007 in Brisbane.
The hearing also involved Rio Doce Australia Pty Limited ("RDA") and CVRD International SA, subsidiaries of CVRD, who are also parties to the Exploration Study and Purchase Option Agreement ("Purchase Option Agreement"). The Purchase Option Agreement grants to RDA an option to purchase a 51% venture interest in the Belvedere Coal Joint Venture, and RDA gave notice on 19 July 2007 of its intention to exercise that option by
payment of USD45 million to each of Aquila and AMCI.
Under the terms of the joint venture agreements, a Change in Control would result in the relevant Aquila Subsidiary obtaining an option to purchase from AMCI its interests in the Australian Premium Iron Joint Venture and the Belvedere Coal Joint Venture (at a price to be determined by an independent expert).
The relevant Aquila Subsidiary's option to purchase (in relation to the Belvedere Coal Joint Venture) would not impact upon RDA's purchase option in respect of the 51% venture interest in the Belvedere Coal Joint Venture.
Aquila reports that the judgment of the Supreme Court of Queensland was handed down today, finding that the restructuring of the AMCI interests in the Australian Premium Iron Joint Venture and the Belvedere Coal Joint Venture did not constitute a Change in Control under the terms of the respective joint venture agreements.
Aquila is disappointed with the outcome in the case and, together with its legal team, is currently examining today's judgment to determine whether there are appropriate grounds for an appeal.
