Altona Energy's Arckaringa talks taking time

Altona said discussions with joint venture partners, Sino-Aus Energy Group and Wintask Group Limited, have become more protracted due to the change in the focus of the project to underground coal gasification, together with the complexity of the original joint venture agreement, exacerbated by the current volatility of global equity and commodity markets.

Arckaringa is a coal-to-chemicals project that aims to exploit the huge coal resources, equivalent to 7.8bn barrels, contained in three exploration licences covering 2,500 sq kms in the northern portion of the Permian Arckaringa Basin in South Australia.

"The board of Altona believes that Sino-Aus remains committed to the project," the management said in a statement, "however, no assurances can be given as to when discussions regarding an amended joint venture agreement will be finalised, although negotiations are well advanced."

Nick Lyth, the company's UK-based non-executive director, is due to meet with the joint venture partners in Xi'an, China in the next week.

Shares in Altona were down 14% to 0.30p on Tuesday.