In a UBS conference update, Macarthur corporate development vice-president Ian McAleese said demand for PCI coal was quite strong as steel producers increase the use of lower priced coals in blast furnaces.

He said high cost producers were under pressure, especially with foreign currencies strengthening against the US dollar.

McAleese also flagged Macarthur’s increased port allocation at Dalrymple Bay Coal Terminal, which will increase progressively from the existing 4.4 million tonnes per annum up to 8.8Mtpa over the next few years.

Macarthur said it intended to fill capacity with production from existing and/or new projects.

Fitting in with increased port allocation of 730,000t at the end of the year is increased throughput capacity of 1Mtpa at its Moorvale coal handling and preparation plant.

Extending the life at Moorvale, Macarthur said mining leases at Olive Downs and Pit F are expected to be granted later this year. Development of the Olive Downs opencut satellite pit will follow later in the mine life as the strip ratio is higher than at Moorvale.

Speaking on the company’s underground aspirations, McAleese said recent 3D seismic work at Moorvale had confirmed the potential of developing an underground mine.

Macarthur closed on Tuesday at $6.41, climbing 37c during the day.