Anglo American to double coal outputFont Size: Decrease Increase Print Page: Print Matt Chambers | September 25, 2009 Article from: The Australian PREDICTING recent Chinese coking coal import demand is here to stay, Anglo American wants to double its global coking coal production by boosting output from its Queensland mines.
The mining giant, which produces most of its 15 million tonnes a year of coking coal from Australia, said it wanted to increase production to 30 million tonnes a year by 2018.
Expanded production beyond 2011 is yet to be sanctioned, but the company is targeting an average 12 per cent annual increase in output each year until then, Anglo Coal boss and former Gold Fields chief executive Ian Cockerill said in a presentation in London.
"Anglo's future seaborne metallurgical (coking) coal growth is focused on consolidating around its existing clusters in the highest-quality metallurgical coal areas of Queensland's Bowen Basin," he said. Australia is the world's biggest exporter of coking coal, mostly from mines in the Bowen Basin of eastern Queensland, which has the world's lowest production cost.
Demand for coking coal, which is used to make steel, slumped late last year with the global financial crisis. But a surprise boost in demand this year from China, where many domestic mines were closed for cost, environmental and safety reasons, saved Australian miners from another round of production cuts.
Demand from China, which had been a net exporter, was treated cautiously at first. But recently, coking coal exporters, including the world's biggest, BHP Billiton, have become more confident the nation's imports can be sustained.
Mr Cockerill said China's demand for seaborne coal was expected to grow at a rate of about 6 per cent a year over the next decade. Most of Anglo's growth will come from previously flagged, but not approved, projects at Moranbah South and Grosvenor, west of Mackay, which have the potential to produce a combined 10 million tonnes a year of coking coal. The remaining 5 million tonnes of capacity would probably come from expansions at its CapCoal and Foxleigh mines, which are further south and can now produce a combined 10 million tonnes of coal a year.
China's imports of Australian coking coal dropped 29 per cent in August, according to Chinese customs data reported this week by Dow Jones Newswires.
Despite the fall, however, it was the third-highest month for Australian imports this year and nine times higher than a year earlier.
The steelmaking giant imported 2.39 million tonnes of Australian coking coal last month, down from record rates of about 3.2 million tonnes in June and July. The drop indicates that some of the higher-cost Chinese coking coalmines are starting to increase production, but analysts do not expect domestic production there to be able to flood the market.
"China's production is increasing, but so is demand," Citi commodities analyst Alan Heap said this week.
Citi raised its coking coal price forecast for the 2010 Japanese financial year from $US140 a tonne to $US200
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