The company currently produces around 5 million tonnes saleable coal per annum but this is expected to reach around 13Mt in the next three years taking into account the acquisition of 51% of Millennium Coal, announced this week. Output could rise as high as 15Mt to 16Mt a year later. The company expects around 5Mt to be coking coal, 3Mt domestic thermal coal and 4.5Mt export thermal coal.
A large portion of the increase will come initially from the Wilpinjong project located 300 kilometers north west of Sydney. Excel got the go ahead to develop this large thermal resource as an open cut mine in December. Production is due to start in 2007 at a rate of 3Mt saleable, increasing to around 5Mt by 2009.
Excel is progressing with exploration and environmental impact studies in preparation to lodge a Development Application in 2005.
During the just completed first quarter of the 2004-05 fiscal year company managed mines produced 1.682Mt, a 14% improvement on the previous year. Millennium Coal is developing an open cut coking coal project in Queensland’s Bowen Basin.
Other developments during the quarter include taking Excel’s ownership of subsidiary HunterCoal to 100% and acquiring control of the Cosila coal project in Venezuela through its 51% owned subsidiary, Excelven
The open-cut Wambo mine in the Hunter Valley produced 1.128Mt during the quarter, up 1.6% on the previous period. Development Consent for the proposed Wambo Rail Project was received from the NSW Government and plans for the expansion of Wambo opencut and the development of the Wambo Seam underground mine were proceeding as planned.
The Metropolitan longwall mine at the NSW town of Helensburgh produced 448,000t during the quarter, lower than planned due to commissioning delays related to the longwall face extension from 135m to 158m in May.
The underground Chain Valley mine near Lake Macquarie in NSW produced 106,000t, with output to double from December 2004.
Like other coal mining companies, Excel is optimistic about the future as strong global demand for metallurgical coal, thermal coal and metallurgical coke continues.
The company said other than the NSW government royalty costs, planned production and sales for fiscal 2005 at the operating mines were in line with Prospectus forecasts. Higher coal prices are expected to generate improved margins in 2004-05.
