Mount Arthur part of 'multi-sourcing' strategy

BHP Billiton announced approvals for construction of the US$411 million Mount Arthur North open cut 15Mtpa thermal coal mine in the Upper Hunter Valley, New South Wales.

Staff Reporter

The mine development is adjacent to the open-cut Bayswater mine and the two resources will be mined as one large, flexible operation, BHP Billiton said.

The project forms a key component of BHP Billiton’s thermal coal strategy, the company said in a press release, designed to expand production from high margin Australian resources to meet growing regional demand for steaming coal. The company intended to pursue a strategy of multi-sourcing to enable it to supply coal into regional markets from Australian, South African, Colombian and Indonesian operations.

Production of 6.3Mt of saleable coal, from the Bayswater/Mount Arthur North complex, is expected to be achieved in financial year 2003. Full production from Mount Arthur North of 12.1Mtpa of saleable coal is expected by 2006.

A portion of the initial production will be supplied under contract for five years to Macquarie Generation for local power station electricity generation, delivered by an existing overland conveyor.

President of BHP Billiton Thermal Coal, Mike Oppenheimer, said: “The Mount Arthur North development forms an important part of BHP Billiton’s ongoing focus to manage a high quality, diverse asset base with an underlying strategic commitment to accelerate the movement towards greater customer service and extended value chain participation.

“The development of this world class resource enhances BHP Billiton’s position to capture an increased share of the assessed strong growth in Asian energy demand in general, and seaborne traded thermal coal demand in particular.”

The stripping ratio for the Mount Arthur North development is approximately 4:1 and production costs are expected to be sustainable in the lowest quartile. Synergies between the project and the Bayswater mine will come from combined management, combined mine planning, sharing of infrastructure, sharing of equipment and joint marketing.

Mount Arthur North contains estimated coal resources of 812Mt (721Mt measured and 91Mt indicated). At full capacity the combined operations will produce up to 14.5Mtpa.

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