MetroCoal achieves 520MT initial thermal coal JORC Resource at Dalby West

Saturday, 10 Dec 2011

MetroCoal has established a maiden JORC Resource of 520 million tonnes thermal coal for the Dalby West project, following completion of its 2011 exploration drilling program.

Dalby West is located at the south eastern end of the Surat Basin in Queensland and MetroCoal’s total Surat Basin underground coal resources now equal 2,883 million tonnes. The resource is based on using underground mining methods to extract the coal seams.

MetroCoal's extensive coal exploration tenements in the Surat Coal Basin cover 4,000 square kilometres and are down dip of well known resources including Wandoan, Elimatta, Cameby Downs and Worri.

Based on the geological information from the historic drilling programs and its own drilling results, MetroCoal expects to identify a coal JORC Inferred Resource of at least 2 billion tonnes within the next two years for conventional underground coal mining.

Modelling has identified the Macalister Upper Seam as being continuous and correlateable within the polygon area. This seam has a minimum thickness of 2.5 metres and an average thickness of over 4.5 metres and has the best potential for mining as a single section.

Several other seams including the Kogan and Macalister Lower Seams were identified.

Coal quality analysis was consistent with expectations of the Macalister Upper Seam which is a low sulphur medium ash thermal coal.

On November 18 MetroCoal and joint venture partner SinoCoal Resources achieved another milestone with the increased Inferred Resource for the Columboola Project in the Surat Basin to nearly 1.3 billion tonnes of thermal coal, up from 540 million tonnes previously.

(sourced Proactiveinvestors)

Vale to spend $875 million on coking coal mine with Aquila

Saturday, 20 August

Vale SA, the world's biggest iron ore exporter, approved spending $875 million to pay its share in the Eagle Downs coal project in Queensland it owns with equal joint venture partner Aquila Resources Ltd.


Eagle Downs, an underground mine project in the Bowen Basin, is planned to produce an average of 4.5 million metric tons of steelmaking coal annually, Rio de Janeiro-based Vale said in an e-mailed statement. The Queensland government also approved the project's mine lease, it said.
Vale expects to "expedite commencement of the project" after board and government approvals, Decio Amaral, Vale's
Global Coal Director, said in the statement. "We're looking to start construction as soon as possible, with the first long wall operation in the third quarter of 2015," he said.

The Brazilian company is mining and developing coal projects from Australia to Columbia and Mozambique, aiming to boost output to 40 million metric tons by 2016. Demand for steel

will rise 6 percent next year, according to the World Steel Association.
Eagle Downs may cost A$1.2 billion to develop, Aquila said May 31, with a board decision due in the second quarter of 2012.
Aquila fell 2.9 percent to A$5.64 at 10:27 a.m. Sydney time, compared with a 2.3 percent drop in the benchmark S&P/ASX 200 index.

Rio targets coal company

Mon, Aug8, 2011 |Agency AAP

Mining giant Rio Tinto has moved to take advantage of plummeting global sharemarkets, offering to buy the coal miner it already mostly owns.

The informal bid for Coal & Allied is viewed by market players as an opportunistic one for a high quality coal company in an industry with few buying opportunities.

Rio Tinto and Mitsubishi Development made the $122 per share joint proposal for the Coal & Allied stock they do not already hold, valuing the company at $10.6 billion, a 34 per cent premium on last week's closing price.

This offer follows other recent moves in the industry, including Peabody and Arcelor Mittal's recent bid for Australia's MacArthur and Rio's own successful takeover of Mozambique-based Riversdale.

The plunges in financial markets of recent days had given Rio the chance to gain full ownership of a good quality coal asset, Mine Life senior resources analyst Gavin Wendt said.

"There is near-term weakness out there, as far as coal company equities and sentiment are concerned ... but the bigger picture has not changed," Mr Wendt told AAP.

"The demand-supply fundamentals (for coal) are very strong."

Rio and Mitsubishi already own nearly 86 per cent of Coal and Allied, with Rio holding 75.7 per cent. Mitsubishi will provide about $1 billion of the $1.5 billion needed for the acquisition.

Coal & Allied has formed a committee to consider the bid, including chairman Bryan Davis, who said he was yet to form a view.

Coal & Allied is based in Brisbane and has three mines in NSW's Hunter Valley that produced 13.23 million tonnes (Mt) of mostly thermal coal (used in power generation) in the six months to June.

The company reported a first half net profit of $227 million late last month.

UBS Resources released a statement giving Coal & Allied a Buy rating, saying that corporates were placing more value on coal than sharemarkets, which may lead to a jump in coal shares.

Coal & Allied was the best performer on the ASX All Ordinaries index on Monday, with its shares shooting up 28 per cent to a three month high $116.20.

Rio shares slumped 4.7 per cent to $68.63. That followed Friday's six per cent drop. Investors are afraid that demand for resources will dry up if the sovereign debt problems in the US and Europe lead to a global recession.

Iron Ore sales contributed nearly 80 per cent to Rio's record $US7.6 billion ($A7.3 billion) record first-half profit last week, compared to less than six per cent from its NSW and Queensland coal mines.

EL&C Baillieu Stockbroking resources analyst Adrian Prendergast said Rio should increase its energy exposure and the coal interests it already owned made it a logical path.

"It certainly will help their business, it integrates with their interests across all commodities as a cheap energy source at the heart of most of their customer bases in developing regions," he said.

Stock Resource managing director Grant Craighead said the advantage of owning 100 per cent of Coal & Allied, was that Rio could fit its operations into its own through marketing, shipping and infrastructure.

The largest institutional shareholder in Coal & Allied, Perpetual Ltd, which owns 6.3 per cent of the company, said it supported the proposal.

The offer of $123.20 per share allows shareholders to retain the dividend of $1.20 per share scheduled to be paid on August 26.

Flooding hits New Hope coal shipments

March23,2011 12:00AM
By Sarah-Jane Tasker,The Australian

QUEENSLAND coalminer New Hope has reported a jump in its first-half profit to $407.4 million, but widespread flooding is still affecting its shipments.

According to the company, the healthy profit was driven by the sale to Royal Dutch Shell and PetroChina of its 16.7 per cent stake in Arrow Energy, which added a one-off $326m to net profit.

Excluding this benefit, net profit in the six months to the end of January fell 27 per cent to $81.1m, on the back of increased costs, Queensland flooding and a strong Australian dollar.

The miner, which operates three mines in Queensland, said although the heavy rainfall in December and January had only a limited effect on mining operations, damage to the Western Rail Line servicing flagship project New Acland had prevented shipment of coal from that mine.

It said rail transport from New Acland had been curtailed for about 2 1/2 months but was expected to resume later this month.

New Hope has ramped up production at its West Moreton operations and increased truck haulage levels from New Acland.

According to the company, this year's second-half result will be harmed by the unavailability of the Western Rail Line and the flow-on effect to exports from New Acland. It added that revised full-year sales forecasts were expected to be in the range of 4.8-5.2 million tonnes.

Clean-coal production for the half year, fell 2 per cent to 2.8 million tonnes.

The Bureau of Meteorology warned yesterday that the area in southeast Queensland where New Hope has its operations had a 70 per cent chance of higher than median rainfall in the three months to the end of June.

Despite the weather, New Hope managing director Rob Neale said the miner had increased export sales during the first half by 23 per cent to 2.7 million tonnes.

"As a result, we are in a good position to take advantage of firming coal prices once transport infrastructure in the region has been repaired," he said.

"Recent acquisitions in both the coal and energy sector complement a very strong balance sheet and provide New Hope with a solid platform for growth in the short to medium term."

The company was positive on the outlook for the price of thermal coal, with contract negotiations between Swiss giant Xstrata and Japanese power generators to start in the next few weeks.

It is understood Xstrata representatives were in Japan ready to start talks just after the Japanese earthquake and tsunami, which have stalled discussions.(sourced Theaustralian)

BHPB H1 metallurgical coal production update

Friday, 18 Feb 2011

BHP Billiton underlying EBIT was USD 1,453 million, an increase of USD 681 million or 88% from the corresponding period. The significant improvement in EBIT margin was largely attributable to higher realized prices.

Hard coking coal, weak coking coal and thermal coal prices increased by 50%, 57% and 43% respectively.

In total, higher prices increased Underlying EBIT by USD 1,147 million, after allowing for the royalty related increase in price linked costs.

Queensland Coal (Australia) production was significantly affected by the persistent rain and flooding that impacted the Bowen Basin in the December 2010 half year. The effect on Queensland Coal sales was minimized by the healthy level of inventory that was held across our supply chain at the commencement of the December 2010 half year. However, weather related disruption and higher labour and contractor rates contributed to an increase in costs for the period. Furthermore, the combined impact of a weaker US dollar and inflation reduced Underlying EBIT by USD 291 million.

BHP Billiton continues to assess the impact of the extreme weather events and confirms that force majeure has been declared for the majority of our Bowen Basin products, including Goonyella Riverside, Peak Downs, Norwich Park, Gregory Crinum, South Walker, Blackwater and Saraji.

The decision to double pumping capacity following severe wet weather in the March 2008 quarter has minimized in-pit water accumulation, although heavy rainfall that persisted for much of the December 2010 half year has significantly restricted overburden removal. When combined with disruptions to external infrastructure, we expect an ongoing impact on production, sales and unit costs for the remainder of the 2011 financial year.