Canada, Mozambique gaining ground on Oz coal

HIGHER royalties will make Australia’s coal-rich state of Queensland less competitive against the newly emerging coal provinces of Canada and Mozambique, according to miner Anglo American Coal.
Canada, Mozambique gaining ground on Oz coal Canada, Mozambique gaining ground on Oz coal Canada, Mozambique gaining ground on Oz coal Canada, Mozambique gaining ground on Oz coal Canada, Mozambique gaining ground on Oz coal

Benga mine opening in Mozambique

Lou Caruana

Mozambique has already attracted giants Rio Tinto and Vale and the west coast of Canada has been the focus of attention from Australian Securities Exchange-listed Coalspur.

Chief executive of Anglo American Metallurgical Coal's business Seamus French said: “[The] royalty increase created the perfect storm for Queensland coal producers when combined with the high foreign exchange rate, lower commodity prices and the introduction of the carbon tax.

“In the short term it will result in job losses, and in the long term will significantly disadvantage Queensland against alternative supply regions such as Canada and Mozambique which enjoy both lower costs and lower tax regimes.”

Rio Tinto has high hopes that its Benga mine in Mozambique will drive growth in its energy division as it ramps up the coking coal mine to commercial production this quarter.

The company sees Mozambique as an emerging coal province that does not have some of the start-up issues of its Australian operations, such as the Kestrel mine in Queensland, which has seen its expansion costs blow out by $900 million to $2 billion.

“Our Energy group is now entering a new phase, with many prospects for value-adding growth to meet expanding long-term global energy demand, while continuing to focus on operational excellence, community engagement, and environmental performance,” the company said.

“Our coal operations in Australia and Africa have expansion projects in either evaluation or execution phase.”

During 2011 Rio Tinto completed the acquisition of Riversdale, which has now been renamed Rio Tinto Coal Mozambique. This provides a substantial Tier 1 coking coal development pipeline in the emerging Moatize Basin, according to the company.

“We continue to grow our world class portfolio of energy assets through the development of the recently acquired Riversdale project and increasing production at existing operations,” Rio Tinto said.

On June 25, 2012, Rio Tinto announced it had exported its first shipment of premium hard coking coal from its Benga.

During the first half of 2012, Rio Tinto Coal Mozambique produced 123,000 tonnes of thermal coal (80,000t attributable) and 130,000t of hard coking coal (85,000t attributable) at Benga.

Coalspur’s flagship is the Vista Coal project which it believes has the potential to become the largest export thermal coal mine in North America. It expects phase 1 of that project to be in operation by 2015.

Coalspur also holds coal leases directly to the south and the north of Vista, which it believes has the potential to host a significant coal resource and leverage off planned Vista infrastructure.

The company completed a feasibility study on Vista, submitted regulatory applications for the first phase of the project and initiated detailed design work. That design work will allow construction work to start once the regulatory approvals are in place.

Phase 1 is expected to produce five million tonnes per annum. Construction of phase 2 is planned to start in 2015 and be producing another 7Mtpa by 2018.

Coalspur also negotiated terms for up to 11.7Mtpa of part capacity at Ridley Terminals, near Prince Rupert, British Columbia, for up to 21 years.

Most read Archive

topics

loader

Most read Archive