Australian company pays Vale, Sumitomo $1 for a coal mine

* Vale, Sumitomo sell coal mine for $1

* New (KOSDAQ: 160550.KQ - news) owner Stanmore coal plans to restart in 2016

* Says time to acquire is while coal prices low

By James Regan

SYDNEY, July 30 (Reuters) - Vale and Sumitomo Corp have sold a jointly-owned coal mine in Australia to a local operator for A$1 ($0.73) amid a sector downturn that has claimed thousands of jobs and billions of dollars in losses.

Stanmore Coal said it plans to restart production at the Isaac Plains coking coal mine during the first half of 2016, more than a year after about 300 jobs were lost when production was halted by 50-50 owners Vale and Sumitomo.

Stanmore's managing director, Nick Jorss, said the mine would yield about 1.1 million tonnes of coking coal yearly, less than half the 2.8 million tonnes mined annually at its peak.

"We think we are at the bottom of the price cycle and the numbers for Isaac Plains stack up," managing director Nick Jorss told Reuters. "From our point of view it's a good time to be acquiring assets."

Since closing the mine, Vale and Sumitomo have been required to honor "take or pay" contracts requiring them to make regular haulage payments to rail carriers regardless of whether any coal was shipped. Stanmore will assume obligations on the contracts, according to Jorss.

Stanmore, with a market capitalisation of A$29 million after its stock soared 74 percent to 12 Australian cents on Thursday, has also assumed a A$32 million obligation to eventually rehabilitate the mine site once the coal reserves are depleted.

Stanmore is breathing new life into the mine while the sector as a whole contracts.

More than 4,000 jobs have been lost at Australian coal mines alone in the past two years, including ones in the collieries that pepper the Bowen Basin in Queensland state, where Isaac Plains is located.

Prices for metallurgical coal used in steel making have fallen from $300 a tonne in 2011 to around $85, reflecting a global supply glut and a slowdown in steel production growth in China, a key destination for Australian coal.

China's metallurgical coal imports fell 25 percent year-on-year in the first four months of 2015 to 15 million tonnes, according to Australia's Department of Industry and Science.

Consultancy Wood Mackenzie forecasts it will be 2020 before the market returns to balance.

Chinese-controlled coal miner Yancoal Australia last week said it was cutting close to half the jobs at two Australian collieries, citing depressed prices.

Sumitomo bought its interest in Isaac Plains from Aquila Resources for A$430 million.

Two years later the mine was part of 30 billion yen in writedowns booked by the Japanese company on Australian coal holdings.

For Vale, the mine represented a potential stepping stone into Australian iron ore mining with Aquila (Paris: FR0010340711 - news) , which held a large undeveloped deposit, a strategy that failed to play out after Aquila sold to Sumitomo.

Aquila was subsequently acquired by China's Baoshan Iron & Steel Co. ($1 = 1.3676 Australian dollars)